Exhibit 10.2


 


SEPARATION/CONSULTING
AGREEMENT

AND GENERAL RELEASE


 


THIS
SEPARATION/CONSULTING AGREEMENT AND GENERAL RELEASE dated as of November 21,
2008 (this “Agreement”) is entered into by David A. Karlin (“Karlin”) and
Poniard Pharmaceuticals, Inc. (“Poniard”).


 


RECITALS


 


A.                                   Karlin has been employed by Poniard and,
on the date of this Agreement, has received notice from Poniard that his
employment relationship with Poniard will terminate effective on the date
hereof.


 


B.                                     Karlin and Poniard wish to enter into an
agreement to clarify and resolve any disputes that may exist between them
arising out of the employment relationship and its termination, and any
continuing obligations of the parties to one another following the end of the
employment relationship.  Poniard has on
this date notified Karlin that it has determined that it no longer requires the
services of Karlin as an officer and employee of Poniard.


 


C.                                     Poniard wishes to engage Karlin, and
Karlin wishes to be engaged by Poniard, as a consultant on the terms and
conditions set forth herein.


 


D.                                    Poniard has advised Karlin of his right
to take up to twenty-one (21) days to consider its severance offer and to
consult an attorney prior to signing this Agreement if he so chooses.  Karlin has either consulted an attorney of
his choice or voluntarily elected not to consult legal counsel, and understands
that he is waiving all potential claims against Poniard.


 


E.                                      This Agreement is not and should not be
construed as an admission or statement by either party that it or any other
party has acted wrongfully or unlawfully. 
Both parties expressly deny any wrongful or unlawful action.


 


AGREEMENTS


 


NOW, THEREFORE, in
consideration of the foregoing recitals and the mutual promises contained
below, it is agreed as follows:


 


1.                                        EMPLOYMENT AND DUTIES AS OFFICER:  ENDING DATES AND RESPONSIBILITIES


 


Karlin’s employment and
service as an officer with Poniard will terminate effective on the date hereof
(the “Termination Date”).  Following the
Termination Date, Karlin will have no further employment duties or
responsibilities to Poniard.  Karlin
agrees that Poniard may assign him such duties, if any, as it deems appropriate
through the Termination Date.


 

















 


2.                                        CHARACTERIZATION OF TERMINATION


 


Karlin and Poniard agree
that for all future purposes they will characterize his termination of
employment as involuntary for reasons other than misconduct or cause.


 


3.                                        SEPARATION BENEFITS


 


(a)           Following Karlin’s termination of
employment, and in accordance with California law, Poniard will pay
Karlin for his employment through the Termination Date (i) his current
salary and (ii) an amount in respect of accrued but unused vacation leave
of Eighty-Nine 55/100 (89.55) hours in the amount of Twelve Thousand Seven
Hundred Seventy-Three 20/100 Dollars ($12,773.20), which constitute “Accrued
Obligations” under Section 5.1(a) of the Severance Agreement (as
defined in Section 7 hereof).  In
addition, Poniard will pay Karlin the following amounts as severance:  (A) the amount due under Section 5.1(c) the
Severance Agreement (which is an aggregate of Two Hundred Twenty-Two Thousand
Five Hundred Dollars ($222,500.00)), which shall be paid through the remainder
of 2008 as provided in Section 5.5 of the Severance Agreement and any
remaining unpaid amount as of December 31, 2008 shall be paid in a lump
sum at the end of the first pay period of Poniard in January, 2009, and (B) Seventy-Four
Thousand One Hundred Seventy-One Dollars ($74,171.00), which represents the
full amount of a bonus that he could have been eligible to receive for 2008 and
which shall be paid at the end of the first pay period of Poniard in January,
2009.  Such severance amounts shall be
subject to applicable tax withholding and to setoff against any amounts owed by
Karlin to Poniard as of the payment date.


 


(b)           Poniard will pay Karlin for health
insurance benefits in accordance with and subject to the terms of Section 5.1(b) of
the Severance Agreement.


 


4.                                        CONSULTING AGREEMENT


 


(a)           Karlin will provide Poniard with
consulting services for a period of six (6) months from the Termination
Date in accordance with the terms set forth in Exhibit A attached hereto,
which the parties are executing simultaneously with the execution of this
Agreement and which shall be effective upon the Effective Date as defined in Section 11
of this Agreement (the “Consulting Agreement”). 
At Poniard’s election given in writing prior to expiration, the term of
the Consulting Agreement may have be extended for an additional six (6) months.  KARLIN CONFIRMS THAT HE HAS READ, FULLY
UNDERSTANDS AND AGREES TO BE BOUND BY THE TERMS OF EXHIBIT A.


 


(b)           Poniard may terminate the Consulting
Agreement early upon fifteen (15) days written notice to Karlin in the event
that Karlin breaches any provision of this Agreement or the Consulting
Agreement and such breach is not cured during such fifteen (15) day
period.  Such termination shall be deemed
termination for “cause” under the Poniard Pharmaceuticals, Inc. Amended
and Restated 2004 Incentive Compensation Plan (the “Plan”).


 


(c)           Karlin and Poniard understand and
hereby acknowledge that nothing in this 


 


2

















 


Agreement shall be
construed to create any relationship other than that of an independent
contractor relationship.  Karlin is not
an agent, employee, officer or trustee of Poniard, and is not entitled to the
benefits provided by Poniard to its agents, employees, officers or trustees,
except as may be expressly provided herein. 
Karlin does not have any authority to, and will not, create or assume
any obligation, express or implied, on behalf of Poniard.  Karlin understands that he is solely
responsible for all taxes, withholdings, and any other statutory or contractual
obligations of any sort.  Karlin agrees
to indemnify and hold Poniard harmless from any and all claims, damages,
liabilities, attorneys’ fees and expenses on account of a claimed failure by
Karlin to satisfy any such obligations. 
Poniard may, during the term of this Agreement, engage other independent
contractors to perform consultant services. 
Poniard will retain no control over the methods by which Karlin performs
his services.


 


5.                                        STOCK OPTIONS


 


(a)           Karlin was granted stock options
under the Plan by Poniard as set forth in Exhibit B attached hereto (the “Options”).  Karlin shall not be eligible for the grant of
any other stock options from Poniard. 
The Options shall continue to vest in accordance with their original
terms and the terms of the Plan during the term of the Consulting Agreement,
including accelerated vesting under certain conditions set forth in Section 10.2
of the Plan and without adjustment to the vesting schedule permitted by the
last sentence of Section 6.2 of the Plan for a reduction in hours of
service.  Those Options that have “cliff
vesting” shall be accelerated in vesting by the same percentage that “cliff
vesting” options held by executive officers of Poniard are accelerated in
vesting for the achievement of 2008 corporate goals (accelerated vesting cannot
exceed more twenty-five percent (25%) of the total amount of the “cliff vesting”
option).  The Options will also
accelerate in vesting in the event that a “Change of Control Date” (as defined
in the Control Agreement, as defined below) occurs during the term of the
Consulting Agreement.


 


(b)           It is recognized that Karlin’s “Termination
of Service” under the Plan will occur when Karlin’s obligation to provide
consulting services under the Consulting Agreement terminates.  Upon Karlin’s Termination of Service for
reasons other than Cause, Retirement, Total Disability or death and
notwithstanding Section 6.5(b)(i) of the Plan, the Options may be
exercised until the earliest of: (i) thirty (30) days after Poniard
receives approval from the FDA of its NDA for Picoplatin; (ii) twenty-four
(24) months after Karlin’s Termination of Service; and (iii) the Option
Expiration Date (as defined in the Plan) for the Options.


 


(c)           Except as provided herein, Karlin
will be able to exercise the Options to the extent such Options are vested and
exercisable in accordance with their original terms and the Plan.  By changing the nature of Karlin’s
relationship with Poniard from an employment relationship to a consulting
relationship, Karlin acknowledges, understands and agrees that all incentive
stock options granted to him will become non-qualified stock options, effective
three (3) months after the Termination Date.  Karlin agrees to pay all applicable
withholding tax obligations at the time of exercise of the Options.  Except as provided herein, the original terms
of the Options shall remain in force.


 


3

















 


6.                                        VALID CONSIDERATION


 


Karlin and Poniard agree
that the additional benefits provided by Poniard to Karlin described in
Sections 3(a)(B), 4 and 5 is not required by Poniard policies or
procedures or by any contractual obligation of Poniard, and is offered by
Poniard solely as consideration for this Agreement.


 


7.                                        REAFFIRMATION OR TERMINATION OF
OBLIGATIONS


 


Karlin acknowledges his
obligations under the NeoRx Corporation Invention and Proprietary Information
Agreement, in the form attached as Exhibit C (“Invention Agreement”), that
applies to the entire period of Karlin’s employment with Poniard and that
survives the execution of this Agreement. 
(Poniard was formerly known as NeoRx Corporation.)  The parties expressly acknowledge and
reaffirm their respective obligations under the Nondisclosure and Return of
Materials terms contained in Section 7.1 and Section 7.2 of the
Amended and Restated Key Executive Severance Agreement, dated March 3,
2008, between Poniard and Karlin, a copy of which is attached as Exhibit D
(“Severance Agreement”).  Except for Section 7.1
and Section 7.2 that survive, the Severance Agreement shall terminate as
of the Termination Date.  The Amended and
Restated Change of Control Agreement (VP), dated as of March 3, 2008,
between Poniard and Karlin, a copy of which is attached as Exhibit E (“Control
Agreement”), shall terminate as of the Termination Date.


 


8.                                        CONFIDENTIALITY OF SEPARATION AGREEMENT


 


Karlin agrees that,
except as otherwise provided by law, he will keep the terms of this Agreement
completely confidential, and that he will not disclose any information
concerning this Agreement or its terms to anyone other than his immediate
family, legal counsel, and/or financial advisors, who will be informed of and
bound by this confidentiality clause, provided that Karlin may advise
prospective employers of the continuing non-disclosure and consulting
obligations owed by Karlin to Poniard.


 


9.                                        GENERAL RELEASE OF CLAIMS


 


Karlin expressly waives
any claims against Poniard and releases Poniard (including its officers,
directors, stockholders, managers, employees, agents and representatives) from
any claims that he may have in any way connected with his employment with
Poniard and the termination thereof.  It
is understood that this release includes, but is not limited to, 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 Poniard’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 Civil Rights Act of 1866, the
Federal Age Discrimination in Employment Act, the Older Workers Benefit
Protection Act, the Americans with Disabilities Act, the Family and Medical
Leave Act, the Washington Law Against Discrimination, the California Fair
Employment and Housing Act, the Federal Fair Labor Standards Act and the
California Labor Code (to the degree such 


 


4

















 


release is allowed
by law), or any other legal limitation on the employment relationship.


 


It is the intention of
Karlin and Poniard that this Agreement is a General Release which shall be
effective as a bar to each and every claim, demand, or cause of action it
releases.  Karlin recognizes that he may
have some claim, demand, or cause of action against Poniard of which Karlin is
totally unaware and unsuspecting, which Karlin is giving up by execution of the
General Release.  It is the intention of
Karlin in executing this Agreement that it will deprive Karlin of each such
claim, demand or cause of action and prevent Karlin from asserting it against
Poniard. In furtherance of this intention, Karlin expressly waives any rights
or benefits conferred by the provisions of section 1542 of the Civil Code of
the State of California, which provides 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.


 


Karlin represents that he
has not filed any complaints, charges or lawsuits against Poniard with any
governmental agency or any court, and agrees that he will not initiate, assist
or encourage any such actions.


 


This waiver and release
shall not waive or release claims where the events in dispute first arise after
execution of this Agreement, nor shall it preclude Karlin from filing a lawsuit
for the exclusive purpose of enforcing his rights under this Agreement.


 


10.                                 MUTUAL NONDISPARAGEMENT


 


Karlin and Poniard agree
to mutually refrain from disparaging the other.


 


11.                                 REVIEW AND REVOCATION PERIOD;
EFFECTIVE DATE


 


Poniard has advised
Karlin that he has up to twenty-one (21) days to review this Agreement and
consult legal counsel if he so chooses. 
Karlin may revoke this Agreement if he so chooses by providing notice of
his decision to revoke the Agreement to Poniard within seven (7) days
following the date he signs this Agreement. 
This Agreement shall become effective and enforceable upon expiration of
this seven (7)-day revocation period (the “Effective Date”).


 


12.                                 SEVERABILITY


 


The provisions of this
Agreement are severable, and if any part of it is found to be unlawful or
unenforceable, the other provisions of this Agreement shall remain fully valid
and enforceable to the maximum extent consistent with applicable law.


 


5

















 


13.                                 KNOWING AND VOLUNTARY AGREEMENT


 


Karlin represents and
agrees that he has read this Agreement, understands its terms and the fact that
it releases any claim he might have against Poniard and its officers,
directors, stockholders, managers, employees, agents and representatives,
understands that he has the right to consult counsel of choice and has either
done so or knowingly waived the right to do so, and enters into this Agreement
without duress or coercion from any source.


 


14.                                 ASSIGNMENT


 


This Agreement is
personal to Karlin and shall not be assignable by Karlin; however, in the event
of Karlin’s death, this Agreement shall inure to the benefit of Karlin’s estate
as allowed by law.


 


Poniard 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 Poniard to assume expressly and agree to perform this Agreement in
the same manner and to the same extent that Poniard would be required to
perform it if no such succession had taken place.  As used in this Agreement, Poniard 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.  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.


 


15.                                 ARBITRATION


 


Any controversies or claims, except as set out below,
arising out of or relating to this Agreement shall be fully and finally settled
by arbitration in accordance with the National Rules for the Resolution of
Employment Disputes of the American Arbitration Association then in effect (the
“AAA Rules”), conducted by one arbitrator mutually agreed upon by Poniard and
Karlin or chosen in accordance with the AAA Rules.  The parties shall have the rights provided
under the AAA Rules, except that the parties shall have such rights to
discovery as would be permitted by the California Code of Civil Procedure, the
arbitrator shall render a written opinion, which shall be subject to review by
the Superior Court of the State of California, the arbitrator may award any
relief that would be available in the California Superior Court, and Employer
will pay the arbitrator’s fees and any other costs of arbitration that would
not be borne by Employee if Employee were a litigant in the California Superior
Court.  The prevailing party shall be
entitled to costs, expenses, and reasonable attorneys’ fees (subject to the
foregoing limitation on responsibility for payment of the arbitrator’s fees and
costs of arbitration), and judgment upon the award rendered by the arbitrator
may be entered in any court having jurisdiction thereof.  Notwithstanding the above procedure, the
parties may also seek equitable relief in an appropriate court for violation of
the terms of the Invention Agreement, the Nondisclosure and Return of Materials
sections of the Severance Agreement, which are reaffirmed herein in Section 7
and the provisions of Exhibit A.


 


6

















 


16.                                 ENTIRE AGREEMENT


 


This Agreement, together
with the Invention Agreement and Consulting Agreement, sets forth the entire
understanding between Karlin and Poniard and supersedes any prior agreements or
understandings, express or implied, pertaining to the terms of Karlin’s
employment with Poniard and the termination of the employment relationship,
including, except as expressly reaffirmed herein, the Severance Agreement and
the Control Agreement.  Karlin
acknowledges that in executing this Agreement, he does not rely upon any
representation or statement by any representative of Poniard concerning the
subject matter of this Agreement, except as expressly set forth in the text of
this Agreement.


 


17.                                 GOVERNING LAW; JURISDICTION AND VENUE


 


This Agreement will be
governed by and interpreted in accordance with the laws of the State of
California, without regard to conflicts of law provisions.  In the event of any court proceedings, the
parties irrevocably consent and submit to the jurisdiction of the federal and
state courts of and located in San Mateo County, California, with regard to any
claims arising under or in connection with this Agreement.


 


18.           WITHHOLDING


 


Poniard may deduct and
withhold from the payments to be made to Karlin hereunder any amounts required
to be deducted and withheld by Poniard under the provisions of any statute,
law, regulation or ordinance now or hereafter enacted.


 


19.           CODE
SECTION 409A


 


Poniard makes no representations or warranties to
Karlin with respect to any tax, economic or legal consequences of this
Agreement or any payments or other benefits provided hereunder, including
without limitation under Section 409A of the Internal Revenue Code of 1986,
as amended, and the regulations and guidance thereunder (“Code Section 409A”),
and no provision of this Agreement shall be interpreted or construed to
transfer any liability for failure to comply with Code Section 409A from
Karlin or any other individual to Poniard or any of its affiliates.  Karlin, by executing this Agreement, shall be
deemed to have waived any claim against Poniard and its affiliates with respect
to any such tax, economic or legal consequences.  However, the parties intend that this Agreement
and the payments and other 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) or
otherwise.  For purposes of Code Section 409A,
each payment provided for under Section 3 hereof shall be treated as a
separate payment.  To the extent Code Section 409A
is applicable to this Agreement (and such payments and benefits), the parties
intend that this Agreement (and such payments and benefits) comply with the
deferral, payout and other limitations and restrictions imposed under Code Section 409A.  Notwithstanding any other provision of this
Agreement to the contrary, this Agreement shall be interpreted, operated and
administered in a manner consistent with such intentions.  Without limiting the generality of the
foregoing, and 


 


7

















 


notwithstanding any other
provision of this Agreement to the contrary, with respect to any payments and
benefits under this Agreement to which Code Section 409A applies, all
references in this Agreement to the termination of Karlin’s employment are
intended to mean Karlin’s “separation from service,” within the meaning of Code
Section 409A(a)(2)(A)(i).  In
addition, if Karlin is a “specified employee,” within the meaning of Code Section 409A(a)(2)(B)(i),
then to the extent necessary to avoid subjecting Karlin to the imposition of
any additional tax under Code Section 409A, amounts that would otherwise
be payable under this Agreement during the six-month period immediately
following Karlin’s “separation from service,” within the meaning of Code Section 409A(a)(2)(A)(i),
shall not be paid to Karlin during such period, but shall instead be
accumulated and paid to Karlin (or, in the event of Karlin’s death, Karlin’s
estate) in a lump sum on the first business day following the earlier of (a) the
date that is six months after Karlin’s separation from service or (b) Karlin’s
death.


 


20.                                 COUNTERPARTS


 


This Agreement may be
executed in one or more counterparts, all of which taken together shall
constitute one agreement.


 


[Signature page follows.]


 


8

















 


IN WITNESS WHEREOF, the
parties have executed this Agreement as of the dates indicated below.


 


 


	
  Poniard
  Pharmaceuticals, Inc.  

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/
  Gerald McMahon

  	
   

  	
  /s/ David A. Karlin

  
	
  Gerald McMahon

  	
   

  	
  David A. Karlin

  
	
  Title: Chairman and
  Chief Executive

  	
   

  	
   

  
	
  Officer

  	
   

  	
  Dated:

  	
  November 21, 2008

  
	
   

  	
   

  	
   

  
	
  Dated:

  	
  November 21, 2008

  	
   

  	
   

  
					



 


9
















 


EXHIBIT A


 


CONSULTING AGREEMENT


 


THIS CONSULTING AGREEMENT
is made between Poniard Pharmaceuticals, Inc. (hereinafter referred to as “Poniard”),
with an address at 300 Elliott Avenue West, Suite 500, Seattle, Washington
98119, and David A. Karlin (hereinafter referred to as “Consultant”), with an
address at 100 Yerba Santa Ave., Los Altos, California 94022.


 


THE PARTIES AGREE AS FOLLOWS:


 


1.                             Effective Date. 
This Agreement shall be effective November 28, 2008, the “Effective
Date” of the Separation/Consulting Agreement and General Release between
Poniard and Consultant dated November 21, 2008 by Consultant (the “Separation
Agreement”).


 


2.                             Term. 
The term of this Agreement shall be from November 21, 2008, (the “Termination
Date” set forth in the Separation Agreement) through May 21, 2009 (six (6) months
after the “Termination Date”).  At
Poniard’s election given in writing prior to expiration, the term of this
Agreement may have be extended for an additional six (6) months.  Consultant may terminate this Agreement upon
fifteen (15) days prior written notice to Poniard, and Poniard may terminate
this Agreement upon fifteen (15) days prior written notice to Consultant in the
event Consultant breaches any provision of the Separation Agreement or this
Agreement and such breach is not cured during such fifteen (15) days.


 


3.                             General Purpose. 
The general purpose of this Agreement is to engage Consultant to provide
consulting services with respect to the clinical, pre-clinical and regulatory
activities of Poniard.  Such services
shall be performed in conformance with professional standards for performing
services of a similar kind.  Consultant
agrees to make himself available to Poniard for consulting services up to a
maximum of twenty-two (22) hours per month in the performance of this
Agreement.  Such services may be provided
to Poniard by telephone or at meetings convened at a mutually agreeable time
and place, or may be provided to others at Poniard’s request.  During the term of this Agreement, Poniard
shall have no obligation to provide Consultant with office space, secretarial
or other support, all of which will be provided by Consultant at his own
expense.


 


4.                             Compensation. 
During the term of this Agreement, Poniard shall pay Consultant the sum
of Four Hundred Fifty Dollars ($450.00) per hour once monthly upon receipt of
an Invoice for the services directed to the attention of Accounts Payable at
Poniard.  The Invoice shall provide the
date and a brief description of the services rendered per day, and Poniard shall
provide payment for approved services within thirty days of receipt of such
Invoice.  In addition, Poniard shall
reimburse Consultant for actual and necessary out-of-pocket expenses incurred,
where such expenses are necessary and related to services rendered under this
Agreement; such expenses should be billed in the same Invoice submitted for
services.  Consultant’s fees are,
however, subject to a maximum of Ten Thousand Dollars ($10,000.00) per month
for services, which maximum cannot be exceeded without the prior written
approval of Poniard before such services are rendered. In the event of early
termination as provided for in Paragraph 2 hereof, Consultant 


 

















 


shall invoice (and Poniard shall pay) for services and
expenses incurred through the date that notice is received.


 


5.                             Independent Contractor. 
The parties understand and hereby acknowledge that nothing in this
Agreement shall be construed to create any relationship other than that of an
independent contractor relationship. 
Consultant is not an agent, employee, officer or trustee of Poniard, and
Consultant is not authorized to transact business, enter into agreements or
otherwise make commitments on behalf of Poniard.  Poniard will not pay or withhold federal,
state or local income tax or other payroll tax of any kind on behalf of
Consultant.  Consultant is not eligible
for, not entitled to, and shall not participate in, any of Poniard’s pension,
health or other benefit plans. 
Consultant is responsible for the payment of all required payroll taxes,
whether federal, state, or local in nature, including, but not limited to
income taxes, Social Security taxes, Federal Unemployment Compensation taxes,
and any other fees, charges, licenses, or payments required by law.  Consultant agrees, consistent with Consultant’s
status as an independent contractor, that Consultant will not apply for
unemployment compensation benefits in connection with and based upon the
termination of consulting services. Consultant indemnifies Poniard and holds it
harmless against any fines, payments, damages, assessments, or attorney fees in
the event a court or administrative agency shall find that Consultant is an
employee of Poniard.


 


Consultant
represents that Consultant retains the rights to control the manner in which the
consulting services are performed and that Poniard is contracting for specified
accomplished tasks; that the consulting services are of a different nature than
the services normally performed by Poniard or that the consulting services will
be performed outside the Poniard facility; and that Consultant is pursuing work
in an independently established business of the same nature as the consulting
services.


 


6.                             Confidentiality.  All data,
materials and information submitted or made available to Consultant by Poniard
or by any other person or entity at the direction of Poniard, unless otherwise
publicly available, and all data, materials and information, and other work
developed by Consultant under this Agreement, shall be utilized by Consultant
in connection with this Agreement only, shall be maintained in confidence and
shall not be made available by Consultant to any other person or entity.


 


7.                             Ownership.


 


(a)                                  Poniard
shall exclusively own all data, information, and other work developed or
obtained by Consultant pursuant to this Agreement, either alone or with others,
including all inventions, discoveries, concepts and ideas, whether patentable
or not, including but not limited to articles, processes, methods, formulas,
systems and techniques, as well as improvements and derivations and know-how
related thereto (hereinafter referred to as “Inventions”).


 


(b)                                 Consultant
hereby assigns to Poniard or its designee all of Consultant’s right, title and
interest in and to any Inventions, any patent applications relating thereto,
and any patents granted thereon, and will execute any such formal Assignment
documents that 


 


2

















 


Poniard may
request from time to time.  Consultant
shall disclose such Inventions to Poniard promptly and in writing.  When requested, and at Poniard’s expense,
Consultant will assist Poniard or Poniard’s designee, in efforts to protect
Poniard’s proprietary and patent rights to such Inventions.


 


(c)                                  Immediately
upon termination of this Agreement for any reason, all such data, information,
and other work, in whatever form, shall be turned over to Poniard.


 


(d)                                 For
purposes of this Agreement any copyrightable work (hereinafter referred to as “Work”)
developed in the course of performance under this Agreement shall be deemed “work
made for hire” under federal copyright law, and all ownership rights to such
Work belong to Poniard.


 


(e)                                  Should
such Work not constitute a “work made for hire” under copyright law, Consultant
hereby grants, transfers, assigns, and conveys to Poniard and its successors
and assigns, the entire right, title and interest in the Work or any part
thereof, including but not limited to the right to reproduce, prepare
derivative works, distribute by sale, license or other transfer; to perform
publicly, to display and to secure copyrights or patents and renewals, reissues
and extensions of any such copyrights or patents in the United States of
America or any foreign country.


 


8.                             Insurance. 
Consultant may or may not maintain a policy of liability insurance to
cover any negligent acts committed by Consultant during the performance of any
duties under this Agreement.


 


9.                             Indemnification. 
Consultant shall hold Poniard harmless from and indemnify Poniard from
any and all liability, loss or damage resulting from the failure of Consultant
to comply with applicable governmental requirements or from the negligence or
willful misconduct of Consultant pertaining to the services to be carried out
pursuant to this Agreement; provided, however, that the foregoing indemnity
shall not apply to claims arising solely out of the negligence or willful
misconduct of Poniard, its officers, employees or agents.


 


10.                       Debarment.  Consultant
represents and warrants that neither Consultant nor any other person retained
by Consultant to perform the services under this Agreement (1) is under
investigation by the FDA for debarment action or is presently debarred pursuant
to the Generic Drug Enforcement Act of 1992, as amended (21 U.S.C. Sec. 301, et
seq), or (2) has a disqualification hearing pending or has been
disqualified by the FDA pursuant to 21 CFR Sec. 312.70 or its successor
provisions.  In addition, Consultant
represents and warrants that Consultant has not engaged in any conduct or
activity which could lead to any of the above mentioned disqualification or
debarment actions.  If during the term of
this Agreement, Consultant or any person retained by Consultant to perform the
services under this Agreement (1) comes under investigation by FDA for
debarment action or disqualification, (2) is debarred or disqualified, or (3) engages
in any conduct or activity which could lead to any of the above-mentioned
disqualification or debarment actions, Consultant shall immediately notify
Poniard.  For the purposes of this section,
reference to the FDA and the Generic Drug Enforcement Act shall also be deemed
a reference to any other 


 


3

















 


governmental or regulatory authorities having
jurisdiction over the subject matter of the services under this Agreement or
any other laws and regulations application to such services.


 


11.                       Conflict of Interest. 
Consultant certifies that Consultant does not have any conflict of
interest or other contractual impediment that could preclude Consultant from
carrying out Consultant’s duties and obligations under this Agreement.  Further, Consultant certifies that Consultant
does not have any financial interest in Poniard (other than stock options
granted during the term of employment) and will not benefit financially or
otherwise by results of Consultant’s services under this Agreement, other than
the fees stated in Paragraph 4 hereof.


 


12.                       Insider Trading. 
Consultant acknowledges and understands that the purchase and sale of
securities on the basis of material nonpublic information, commonly referred to
as “inside information”, or the selective disclosure of inside information to
others who may trade, is prohibited by federal and state laws.  Consultant agrees to comply with all
securities laws and regulations, and Consultant will not use any inside
information gained through Consultant’s relationship with Poniard to trade in
the securities of Poniard or any other company to which the inside information
may apply.


 


13.                       Compliance with Applicable
Laws.  Consultant warrants and represents that
Consultant will comply with all federal, state, and local laws applicable to
performance of the work under this Agreement.


 


14.                       Authority and Adherence. 
Consultant warrants that Consultant has the authority to enter into this
Agreement and that entering into this Agreement is not restricted or prohibited
by any existing agreement to which Consultant is a party.  Further, Consultant shall require Consultant’s
contractors and other personnel to adhere to the terms of this Agreement.


 


15.                       Assignment and Subcontract. 
This Agreement may not be assigned or subcontracted by Consultant
without the express written consent of Poniard.


 


16.                       Advertisement. 
Consultant may not use the name Poniard Pharmaceuticals, Inc. or
any variation thereof for advertising or publicity purposes without first
obtaining the written consent of Poniard.


 


17.                       Governing Law;
Jurisdiction.  This Agreement is governed by the laws of the
State of Washington, without regard to any conflicts-of-law principle that
directs the application of another jurisdiction’s laws.  Venue of any suit or proceeding arising out
of or relating to this Agreement shall lie exclusively in the state or federal
courts located in King County, Washington, and each party hereby irrevocably
and unconditionally submits to the exclusive jurisdiction of such courts.  Further, if Poniard is reasonably required to
initiate legal action under this Agreement, Poniard shall be entitled to
recover its reasonable attorney’s fees and costs from the Recipient.


 


18.                       No Presumption Against
Drafter.  For purposes of this Agreement, the parties
hereby waive any rule of construction that requires that ambiguities in
this Agreement be construed against the drafter.


 


4

















 


19.                       Notices. 
Each notice required or permitted to be given pursuant to this Agreement
shall be in writing and shall be deemed sufficiently given if delivered by fax
or by an express/overnight delivery service provided by a commercial carrier,
properly addressed to the other party at the address designated in the first
paragraph of this Agreement, or to such other address as may be designated in
writing.  Notices shall be considered
received on the date faxed or on the date of the dated receipt from the
commercial carrier.


 


20.                       Waiver. 
A delay or failure by either party to exercise any right under this
Agreement will not constitute a waiver of that or any similar or future right.


 


21.                       Severability. 
If any provision of this Agreement is declared invalid by any Court,
then such provision shall be deemed automatically modified to conform to the
requirements for validity as declared at such time, and as so modified, shall
be deemed a provision of this Agreement as though originally included herein.  In the event that the provision invalidated
is of such a nature that it cannot be modified, the provision shall be deemed
deleted from this Agreement as though the provision had never been included
herein.  In either case, the remaining
provisions of this Agreement shall remain in effect.


 


22.                       Survival of Obligations. 
The provisions of Paragraph 6, 7, 9, 12, 17 and 20 shall survive
termination or expiration of this Agreement.


 


23.                       Entire Agreement. 
This Agreement represents the entire understanding of the parties
regarding consulting services (except with respect to stock options held by
Consultant as set forth in Section 5 of the Separation Agreement) and may
not be modified except by written agreement of the parties and supersedes all
prior written and/or oral agreements.


 


24.                       Credentials. 
Consultant attaches to this Agreement Consultant’s Curriculum Vitae or
other credentials, which credentials are attached as Appendix “A” and made a
part hereof.


 


	
  Poniard
  Pharmaceuticals, Inc.

  	
   

  	
  Consultant

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Gerald McMahon

  	
   

  	
  Name: David A. Karlin

  
	
   

  	
   

  	
   

  
	
  Title: CEO

  	
   

  	
  Signature:

  	
  /s/ David A. Karlin

  
						



 


5

















 


EXHIBIT B


 


STOCK OPTIONS


 


	
   

  	
  Poniard Pharmaceuticals, Inc.

  	
  Page:1

  
	
  Personnel Grant Status

  	
  ID:91-1251311

  	
  File:    Optsimt

  
	
   

  	
  7000 Shoreline Ct.

  	
  Date:  11/6/2008

  
	
   

  	
  Suite 270

  	
  Time: 2:28:10PM

  
	
   

  	
  So. San Francisco, CA   94080

  	
   

  
	
   

  	
   

  	
   

  
	
  AS OF 11/6/2008

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  David KARLIN

  	
   

  	
   

  
	
  100 Yerba Santa Avenue

  	
   

  	
   

  
	
  Los Altos, CA. USA 94022

  	
   

  	
   

  



 


STOCK OPTIONS


 


	
  Number

  	
   

  	
  Grant

  Date

  	
   

  	
  Plan

  	
   

  	
  Type

  	
   

  	
  Granted

  	
   

  	
  Price

  	
   

  	
  Exercised

  	
   

  	
  Vested

  	
   

  	
  Cancelled

  	
   

  	
  Unvested

  	
   

  	
  Outstanding

  	
   

  	
  Exercisable

  	
   

  
	
  SP3058

  	
   

  	
  7/1/2005

  	
   

  	
  2004

  	
   

  	
  ISO

  	
   

  	
  41,666

  	
   

  	
  $

  	
  3.72000

  	
   

  	
  0

  	
   

  	
  34,722

  	
   

  	
  0

  	
   

  	
  6,944

  	
   

  	
  41,666

  	
   

  	
  34,722

  	
   

  
	
  SP3086

  	
   

  	
  4/29/2006

  	
   

  	
  2004

  	
   

  	
  ISO

  	
   

  	
  36,138

  	
   

  	
  $

  	
  7.50000

  	
   

  	
  0

  	
   

  	
  20,986

  	
   

  	
  0

  	
   

  	
  15,152

  	
   

  	
  36,138

  	
   

  	
  20,986

  	
   

  
	
  SP3087

  	
   

  	
  4/29/2006

  	
   

  	
  2004

  	
   

  	
  NQ

  	
   

  	
  5,528

  	
   

  	
  $

  	
  7.50000

  	
   

  	
  0

  	
   

  	
  5,056

  	
   

  	
  0

  	
   

  	
  472

  	
   

  	
  5,528

  	
   

  	
  5,056

  	
   

  
	
  SP3214

  	
   

  	
  6/14/2007

  	
   

  	
  2004

  	
   

  	
  NQ

  	
   

  	
  8,750

  	
   

  	
  $

  	
  5.98000

  	
   

  	
  0

  	
   

  	
  3,182

  	
   

  	
  0

  	
   

  	
  5,568

  	
   

  	
  8,750

  	
   

  	
  3,182

  	
   

  
	
  SP3215

  	
   

  	
  6/14/2007

  	
   

  	
  2004

  	
   

  	
  NQ

  	
   

  	
  18,750

  	
   

  	
  $

  	
  5.98000

  	
   

  	
  0

  	
   

  	
  6,818

  	
   

  	
  0

  	
   

  	
  11,932

  	
   

  	
  18,750

  	
   

  	
  6,818

  	
   

  
	
  SP3265

  	
   

  	
  6/14/2007

  	
   

  	
  2004

  	
   

  	
  NQ

  	
   

  	
  2,815

  	
   

  	
  $

  	
  3.66000

  	
   

  	
  0

  	
   

  	
  1,155

  	
   

  	
  0

  	
   

  	
  1,660

  	
   

  	
  2,815

  	
   

  	
  1,155

  	
   

  
	
  SP3266

  	
   

  	
  6/14/2007

  	
   

  	
  2004

  	
   

  	
  NQ

  	
   

  	
  56,172

  	
   

  	
  $

  	
  3.66000

  	
   

  	
  0

  	
   

  	
  23,045

  	
   

  	
  0

  	
   

  	
  33,127

  	
   

  	
  56,172

  	
   

  	
  23,045

  	
   

  
	
  SP3273

  	
   

  	
  6/14/2007

  	
   

  	
  2004

  	
   

  	
  NQ

  	
   

  	
  6,771

  	
   

  	
  $

  	
  3.14000

  	
   

  	
  0

  	
   

  	
  2,257

  	
   

  	
  0

  	
   

  	
  4,514

  	
   

  	
  6,771

  	
   

  	
  2,257

  	
   

  
	
  SP3274

  	
   

  	
  6/14/2007

  	
   

  	
  2004

  	
   

  	
  NQ

  	
   

  	
  58,229

  	
   

  	
  $

  	
  3.14000

  	
   

  	
  0

  	
   

  	
  19,410

  	
   

  	
  0

  	
   

  	
  38,819

  	
   

  	
  58,229

  	
   

  	
  19,410

  	
   

  
	
  SP3305

  	
   

  	
  6/14/2007

  	
   

  	
  2004

  	
   

  	
  NQ

  	
   

  	
  2,500

  	
   

  	
  $

  	
  5.98000

  	
   

  	
  0

  	
   

  	
  2,500

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  2,500

  	
   

  	
  2,500

  	
   

  
	
  SP3354

  	
   

  	
  6/14/2007

  	
   

  	
  2004

  	
   

  	
  NQ

  	
   

  	
  28,133

  	
   

  	
  $

  	
  3.66000

  	
   

  	
  0

  	
   

  	
  28,133

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  28,133

  	
   

  	
  28,133

  	
   

  
	
  SP3364

  	
   

  	
  6/14/2007

  	
   

  	
  2004

  	
   

  	
  NQ

  	
   

  	
  58,080

  	
   

  	
  $

  	
  3.66000

  	
   

  	
  0

  	
   

  	
  14,520

  	
   

  	
  0

  	
   

  	
  43,560

  	
   

  	
  58,080

  	
   

  	
  14,520

  	
   

  
	
  SP3417

  	
   

  	
  1/3/2008

  	
   

  	
  2004

  	
   

  	
  ISO

  	
   

  	
  20,415

  	
   

  	
  $

  	
  4.18000

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  20,415

  	
   

  	
  20,415

  	
   

  	
  0

  	
   

  
	
  SP3418

  	
   

  	
  1/3/2008

  	
   

  	
  2004

  	
   

  	
  NQ

  	
   

  	
  19,585

  	
   

  	
  $

  	
  4.18000

  	
   

  	
  0

  	
   

  	
  8,334

  	
   

  	
  0

  	
   

  	
  11,251

  	
   

  	
  19,585

  	
   

  	
  8,334

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  363,532

  	
   

  	
   

  	
   

  	
  0

  	
   

  	
  170,118

  	
   

  	
  0

  	
   

  	
  193,414

  	
   

  	
  363,532

  	
   

  	
  170,118

  	
   

  



 
















 


EXHIBIT C


 


NEORX
CORPORATION


 


INVENTION AND PROPRIETARY INFORMATION AGREEMENT


 


DAVID A. KARLIN


 


In
an effort to define and clarify my rights and obligations as an employee, and
the rights and obligations of NeoRx Corporation and any of its subsidiaries and
affiliates to which its employees are assigned (hereinafter the “Company”); and


 


In
recognition of the importance of confidential information, trade secrets and
inventions to the Company; and


 


In
consideration of my employment by the Company, any opportunities for
advancement or reassignment that the Company may from time to time offer me,
the training, contacts, experience and confidential information I will receive
within the first month and throughout the course of such employment, the
compensation paid to me in connection with such employment and any stock and/or
stock options which have been or may be granted to me by the Company.


 


I
agree as follows:


 


1.             For purposes of this
Agreement, the terms:


 


(a)                                  “Inventions”
means discoveries, developments, designs, improvements, inventions and works of
authorship, whether or not patentable, copyrightable or otherwise legally
protectable. This includes, but is not limited to, any new machine, article of
manufacture, biological material, method, process, technique, use, equipment,
device, apparatus, system, compound, formulation, composition of matter, design
or configuration of any kind, or any improvement thereon, whether or not
reduced to writing or practice, and


 


(b)                                 “Proprietary
Information” means information and materials (biological, chemical or
otherwise) not generally known or available outside the Company and information
and materials entrusted to the Company by third parties. This includes, but is
not limited to, trade secrets, confidential knowledge, ideas, mask works,
source and object codes, biological materials such as nucleic acids, proteins,
organisms, cell lines, antibodies or antigen source materials, or fragments
thereof, and information which may relate, for example, to Inventions,
research, development, manufacturing, business plans, personnel, purchasing,
financial data, marketing or selling. Proprietary Information may include or
may be contained in material such as drawings, samples, prototypes, data,
procedures, specifications, reports, studies, customer or supplier lists,
budgets, cost or price lists, compilations or computer programs, or may be in
the nature of unwritten knowledge or know-how.


 


1

















 


2.             All Proprietary
Information which is made available to me or which I conceive, create, develop,
reduce to practice, or compile, either alone or with others, during the term of
my employment shall be the exclusive property of the Company, and I hereby
assign to the Company my entire right, title and interest in all such
Proprietary Information. I will preserve in confidence and will not disclose or
use, either during or after the term of my employment, any Proprietary
Information, except as required in my work for the Company or as authorized in
writing by the Company. With respect to Proprietary Information received by the
Company from a third party, I will abide by any additional terms and conditions
(including limitations on use) imposed upon the Company by the third party of
which I am aware. Upon termination of my employment or upon request, I will
deliver to the Company all forms of materials in my possession that contain or
embody any Proprietary Information.


 


3.             I will not use in
performance of my work for the Company or disclose to the Company any trade
secret, confidential or proprietary information of any prior employer or other
person or entity if and to the extent that such disclosure may cause any
breach, default or violation of any obligation or duty that I owe to such other
person or entity (e.g., under any agreement or applicable law). My compliance
with this paragraph will not prohibit, restrict or impair the performance of my
work, obligations and duties to the Company.


 


4.             I hereby assign to
the Company my entire right, title and interest in and to all Inventions that I
conceive, create, develop or reduce to practice, either alone or with others,
during the term of my employment. I will promptly and fully record and disclose
to the Company in writing any such Inventions and Proprietary Information that
I make, conceive, or develop, in whole or in part, and either solely or jointly
with others during the entire term of my employment by the Company.


 


NOTICE: Any assignment of Inventions required by this
Agreement does not apply to an Invention for which no equipment, supplies,
facility or trade secret information of the Company was used and which was
developed entirely on the employee’s own time, unless (a) the Invention
relates (i) directly to the business of the Company or (ii) to the Company’s
actual or demonstrably anticipated research or development or (b) the
Invention results from any work performed by the employee for the Company.


 


5.             During or after my
employment, upon the Company’s request and at the Company’s expense, I will
execute all papers in a timely manner and do all acts necessary to apply for,
secure, maintain, defend or enforce patents, copyrights and any other legal
rights in the United States and foreign countries in Inventions and Proprietary
Information covered by Paragraphs 2 and 4, and I will execute all papers and do
any and all acts necessary to document the assignment and transfer to the
Company of my entire right, title and interest in and to such Inventions and
Proprietary Information. If, for any reason, the Company is unable to secure my
signature on any paper required under this Paragraph 5, I hereby irrevocably
designate and appoint the Company and its duly authorized officers and agents
as my agent and attorney-in-fact to act for me, and in my behalf, to execute
and process any such papers and to do all other lawful acts to further the
intent of this Paragraph 5.


 


2

















 


6.             I have prepared and
attached hereto a list of all Inventions, patent applications and patents
conceived, created, developed or reduced to practice by me or with others prior
to my employment with the Company, which are subject to prior agreements or
which I desire to exclude from this Agreement, or if no such list is attached,
I hereby represent and warrant that there are no such Inventions, patent
applications or patents. If in the course of my employment with the Company, I
use or incorporate into a product or process an Invention not assigned by
Paragraph 4 of this Agreement in which I have an interest, the Company is
hereby granted a nonexclusive, fully paid-up, royalty-free, perpetual,
worldwide license of my interest (with right to sublicense) to make, have made,
use, sell, offer to sell and import such Invention without restriction.


 


7.             In order to aid in
the protection of the Inventions and Proprietary Information of the Company,
during the term of my employment and for one (1) year thereafter, I will
not, for my benefit or the benefit of others without the Company’s written
consent (a) engage in research or development with respect to the same or
reasonably similar projects (e.g., type of product and indicator) on which I
was performing research or development for the Company or (b) directly or
indirectly be employed or involved with any business unit developing or
exploiting any products or services that are competitive with products or
services (i) being developed or exploited by the Company during my
employment and (ii) on which I worked or about which I learned Proprietary
Information during my employment with the Company.


 


8.             During the term of
my employment and for one (1) year thereafter, I will not, directly or
indirectly, recruit, solicit or induce in any way any employee, advisor or
consultant of the Company to terminate his or her relationship with the
Company, to engage in activities competitive with the Company or not to provide
future services to the Company. During the term of my employment and for one (1) year
thereafter, I will not, directly or indirectly, solicit, induce or encourage in
any way any strategic partners, customers, suppliers or vendors to terminate or
reduce their relationship with the Company or not to enter into any business or
relationship with the Company.


 


9.             I acknowledge that
any violation of this Agreement by me will cause irreparable injury to the
Company, and I agree that the Company will be entitled to extraordinary relief
in court, including, but not limited to, temporary restraining orders,
preliminary injunctions and permanent injunctions without the necessity of
posting a bond or other security and without prejudice to any other rights and
remedies that the Company may have for a breach of this Agreement.


 


10.           This Agreement will
be governed by and construed in accordance with the laws of the state of Washington
(regardless of its choice-of-law provisions). I irrevocably consent to the
jurisdiction and venue of the state and federal courts located in King County,
Washington, in connection with any action relating to this Agreement. Further,
I will not bring any action relating to this Agreement in any other court.


 


3

















 


11.           My execution,
delivery and performance of this Agreement and the performance of my other
obligations and duties to the Company will not cause any breach, default or
violation of any employment, nondisclosure, confidentiality, consulting or
other agreement to which I am a party or by which I may be bound.


 


12.           I will not (a) make
any false, misleading or disparaging representations or statements with regard
to the Company or the products or services of the Company, or (b) make any
statement that may impair or otherwise adversely affect the goodwill or
reputation of the Company.


 


13.           I agree and
understand that nothing in this Agreement will confer any right with respect to
continuation of my employment by the Company, nor will it interfere with the
Company’s right to terminate my employment at any time.


 


14.           The obligations of
this Agreement will continue beyond the termination of my employment and will
be binding on my heirs, assigns and legal representatives. If any obligation
herein is held to be too broad to be enforced, it will be construed to be
enforceable only to the full extent permitted by law. This Agreement is for the
benefit of the Company, its successors and assigns (including all present and
future subsidiaries, affiliates, joint ventures and associated companies) and
is not conditioned on my employment for any period of time or compensation
therefor.


 


 


I
HAVE READ AND FULLY UNDERSTOOD THIS AGREEMENT.


 


 


	
   

  	
  /s/ David A.
  Karlin

  
	
   

  	
  Signature
  – David A. Karlin

  
	
   

  	
   

  
	
   

  	
  Date

  	
  6/23/2005

  



 


4

















 


PLEASE CHOOSE ONE  OF THE FOLLOWING OPTIONS BELOW:


 


	
  x

  	
   

  	
  I
  have no inventions nor am I an inventor on any patent application  or patent as of the above
  date.

  
	
  o

  	
   

  	
  I
  have no inventions nor am I an inventor on any patent application  or patent other than with
  NeoRx Corporation.

  
	
  o

  	
   

  	
  The
  following is a list of my inventions, patent applications or patents  prior to my employment with
  NeoRx Corporation:

  



 


 


	
   

  	
  /s/ David A.
  Karlin

  
	
   

  	
  Employee
  – David A. Karlin

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Kathryn Knowles

  
	
   

  	
  NeoRx
  Witness

  



 


5
















 


EXHIBIT D


 


PONIARD PHARMACEUTICALS,
INC.

AMENDED AND RESTATED

KEY EXECUTIVE SEVERANCE AGREEMENT


 


This Amended and
Restated Key Executive Severance Agreement (this “Agreement”),
dated as of March 3, 2008, is entered into by and between PONIARD PHARMACEUTICALS,
INC., a Washington corporation (formerly known as NeoRx Corporation and as
supplemented by Section 10, the “Company”), and DAVID
KARLIN (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 of one (1) year from the date of this  Agreement as first appearing above;
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


 


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 by any affiliated or successor company 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                               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
Notice of Termination (as defined below).


 


4.2                               Automatic Termination


 


This Agreement and
the Executive’s employment 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


 


2

















 


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 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 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.


 


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”):


 


3

















 


(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)                                 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
Company shall pay the Executive’s premiums for health insurance benefit
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 the Executive’s
employment is terminated during the Term 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 


 


4

















 


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), 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) 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) 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 (“Payment Period”).  For purposes of determining the payment
schedule, other than for deferred compensation pursuant to Section 5.1(a)(ii),
to the extent that the payment schedule in this Section 5.5 would subject
payments to the distribution requirements set forth in Section 409A(a)(2) of
the Internal Revenue Code of 1986, as amended (“Code”), because the Date of
Termination is different than the date that a person would be deemed to have
had a separation from service within the meaning of Code Section 409A(a)(2)(i),
the Date of Termination shall be treated as the latest date so as to not
subject such payments to the distribution requirements set forth in Code Section 409A(a)(2).  Notwithstanding the preceding provisions of
this Section 5, if necessary to meet the requirements of subparagraphs (A)(i) and
(B)(i) of Code Section 409A(a)(2), the amounts that would normally be
paid during the first six months after the Executive’s separation from service
within the meaning of Code Section 409A(a)(2) shall not be paid to an
Executive who is a specified employee (as defined in Code Section 409A(a)(2)(B)(i) in
accordance with the procedures established by the Compensation Committee) until
the six-month anniversary of the Executive’s separation from service.


 


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 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;


 


5

















 


(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)                                  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;


 


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.


 


6

















 


5.8                               General Release of Claims


 


As a condition to
the payment contemplated by this Section 5, the Executive shall execute a
general release and waiver of claims against the Company in a form satisfactory
to the Company in its sole discretion. 
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.  Such release and waiver shall be delivered to
the Company no later than the fifteenth day of the third month of the fiscal
year following the year in which the Date of Termination occurs.


 


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 (i) settlement
by the parties, (ii) determination by arbitration in accordance with Section 14
hereof that Good Reason did not exist, and (iii) 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 examinations by a
physician or physicians designated, paid for and arranged by the Company.  The Executive agrees that the examination’s
medical report shall be provided to the Company.


 


7

















 


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 agreement 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 without the prior written consent of the Company.  The Executive understands that the Company
will be relying on this covenant 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:


 


8

















 


	
  If to the Executive:

  	
  David Karlin

  
	
   

  	
  [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, 48th Floor

  
	
   

  	
  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, the “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.


 


9

















 


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 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.


 


10

















 


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 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


 


The Company and
the Executive are entering into an Amended and Restated 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 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, 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


 


11

















 


Section 4999 of the Code 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
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 IRS.


 


18.                               Entire Agreement


 


This Agreement
supersedes and replaces the Key Executive Severance Agreement, dated as of June 23,
2005, between the parties, and 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 10 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
Company intends that this Agreement fully comply with the payout and other
limitations and restrictions imposed under Code Section 409A if and to the
extent such Code Section 409A is otherwise applicable to payments under
this Agreement and such compliance is necessary to avoid the penalties
otherwise imposed under Code Section 409A. In this connection, the Company
and Executive agree that the payout timing provisions and any other terms of
this Agreement shall be interpreted and deemed modified, if and to the extent
necessary, to comply with the payout and other limitations and restrictions
imposed under Code Section 409A if and to the extent such Code Section 409A
is otherwise applicable to this Agreement and such compliance is necessary to
avoid the penalties otherwise imposed under Code Section 409A.


 


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.


 


12

















 


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/ Caroline Loewy

  
	
   

  	
   

  	
  Name: Caroline Loewy

  
	
   

  	
   

  	
  Its:  Chief
  Finanical Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  EXECUTIVE

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David Karlin

  
	
   

  	
  Name:  David Karlin

  



 


13
















 


EXHIBIT E


 


PONIARD
PHARMACEUTICALS, INC.

AMENDED AND RESTATED

CHANGE OF CONTROL AGREEMENT (VP)


 


This Amended and Restated Change of Control Agreement (VP) (this “Agreement”),
dated as of March 3, 2008, is entered into by and between PONIARD PHARMACEUTICALS,
INC., a Washington corporation (formerly known as NeoRx Corporation and as
supplemented by Section 13, the “Company”),
and DAVID KARLIN (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 possibility, threat or occurrence of a
Change of Control (as defined in Section 1 hereof) of the Company.  The Board believes it is imperative to
diminish the inevitable distraction of the Executive arising from the personal
uncertainties and risks created by a pending or threatened Change of Control,
to encourage the Executive’s full attention and dedication to the Company
currently and in the event of any threatened or pending Change of Control, and
to provide the Executive with reasonable compensation and benefit arrangements
upon a Change of Control.


 


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


 


1.                                      Definitions


 


1.1                                 “Change of Control” shall have the definition set forth
in Appendix A hereto, which is hereby incorporated by reference.


 


1.2                                 “Change of Control Date” shall mean the first date on
which a Change of Control occurs.


 


1.3                                 “Employment Period” shall mean the two (2) year
period commencing on the Change of Control Date and ending on the second
anniversary of such date.


 


1.4                                 “Original Agreement” shall mean the Change of Control
Agreement, dated as of June 23, 2005, between the parties.


 


1.5                                 “Severance Agreement” shall mean the Amended and Restated
Key Executive Severance Agreement, dated as of the date hereof, between the
parties, as it may be amended from time to time, that provides for certain
benefits related to termination of the Executive’s employment that are
unrelated to a Change of Control.


 

















 


2.                                      Term


 


The initial term of this Agreement (“Initial
Term”) shall be for a period of one (1) year
from the date this Agreement as first appearing above; 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 at least ninety (90) days
prior to the end of the Initial Term or any Renewal Term, and provided further
that if a Change in Control occurs during the Term, the Term shall
automatically extend for the duration of the Employment Period.  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.


 


3.                                      Employment


 


3.1                               Employment
Period


 


During the Employment Period, the Company hereby agrees to continue the
Executive in its employ or in the employ of its affiliated companies, and the
Executive hereby agrees to remain in the employ of the Company or its
affiliated companies, in accordance with the terms and provisions of this Agreement;
provided, however, that either the Company or the Executive may terminate the
employment relationship subject to the terms of this Agreement.


 


3.2                               Position and
Duties


 


During the Employment Period, the Executive’s position, authority,
duties and responsibilities shall be at least commensurate in all material
respects with the most significant of those held, exercised and assigned at any
time during the ninety (90) day period immediately preceding the Change of
Control Date.


 


3.3                               Location


 


During the Employment Period, the Executive’s services shall be
performed at the Company’s offices on the Change of Control Date at which the
Executive was employed or any office that is subsequently designated by the
Company and is less than thirty (30) miles from such location.


 


3.4                               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 its 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.  Moreover, if prior to the Change of Control
Date, the Executive’s 


 


2

















 


employment with the Company or its affiliated
companies terminates for any reason, then the Executive shall have no further
rights under this Agreement; provided, however, that the Company may not avoid
liability for any termination payments that would have been required during the
Employment Period pursuant to Section 8 hereof by terminating the
Executive prior to the Employment Period where such termination is carried out
in anticipation of a Change of Control and the principal motivating purpose is
to avoid liability for such termination payments.


 


4.                                      Attention and
Effort


 


During the Employment Period, 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 use the Executive’s reasonable best
efforts 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 Employment Period, the continued
conduct of such activities (or the conduct of activities similar in nature and
scope thereto) during the Employment Period shall not thereafter be deemed to
interfere with the performance of the Executive’s responsibilities to the
Company.


 


5.                                      Compensation


 


As long as the Executive remains employed by the Company during the
Employment Period, the Company agrees to pay or cause to be paid to the
Executive, and the Executive agrees to accept in exchange for the services
rendered hereunder by the Executive, the following compensation:


 


5.1                               Salary


 


The Executive shall receive an annual base salary (the “Annual
Base Salary”), at least equal to the annual salary established
by the Board or the Compensation Committee of the Board (the “Compensation
Committee”) or the Chief Executive Officer for the fiscal year
in which the Change of Control Date occurs. 
The Annual Base Salary shall be paid in substantially equal installments
and at the same intervals as the salaries of other executives of the Company
are paid.  The Board or the Compensation
Committee or the Chief Executive Officer shall review the Annual Base Salary at
least annually and shall determine in good faith and consistent with any
generally applicable Company policy any increases for future years.


 


3

















 


5.2                               Bonus


 


In addition to the Annual Base Salary, the Executive shall be awarded,
for each fiscal year ending during the Employment Period, an annual performance
bonus (the “Annual Performance Bonus”) in
cash at least equal to the average annualized (for any fiscal year consisting
of less than twelve (12) full months) bonus paid or payable to the Executive by
the Company and its affiliated companies in respect of the Executive’s
performance during the three fiscal years (or such shorter period of
employment) immediately preceding the fiscal year in which the Change of
Control Date occurs.  Each Annual
Performance Bonus shall be paid in the fiscal year following the fiscal year
for which the Annual Performance Bonus is awarded, but no later than the
fifteenth day of the third month of such subsequent fiscal year, unless the
Executive shall elect to defer the receipt of the Annual Performance Bonus in
accordance with the terms of the Company’s deferred compensation program.


 


6.                                      Benefits


 


6.1                               Incentive,
Retirement and Welfare Benefit Plans; Vacation


 


As long as the Executive remains employed by the Company during the
Employment Period, the Executive shall be entitled to participate, subject to
and in accordance with applicable eligibility requirements, in such fringe
benefit programs as shall be generally made available to other executives of
the Company and its affiliated companies from time to time during the
Employment Period by action of the Board (or any person or committee appointed
by the Board to determine fringe benefit programs and other emoluments),
including, without limitation, paid vacations; any stock purchase, savings or
retirement plan, practice, policy or program; and all welfare benefit plans,
practices, policies or programs (including, without limitation, medical,
prescription, dental, disability, salary continuance, employee life, group
life, accidental death and travel accident insurance plans or programs).


 


6.2                               Expenses


 


As long as the Executive remains employed by the Company during the
Employment Period, the Executive shall be entitled to receive prompt
reimbursement for all reasonable employment expenses incurred by the Executive in
accordance with the policies, practices and procedures of the Company and its
affiliated companies in effect for the executives of the Company and its
affiliated companies during the Employment Period.  Without limitation on the foregoing,
reimbursement shall be made no later than the end of the fourth month of the
year following the year in which the expense was incurred.


 


7.                                      Termination


 


During the Employment Period, employment of the Executive may be
terminated as follows, but, in any case, the nondisclosure provisions set forth
in Section 10 hereof shall survive the termination of this Agreement and
the termination of the Executive’s employment with the Company:


 


4

















 


7.1                               By the Company
or the Executive


 


At any time during the Employment Period, 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 the Notice of Termination (as defined
below).


 


7.2                               Automatic
Termination


 


This Agreement and the Executive’s employment during the Employment
Period 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 duties set forth in Section 3.2
hereof 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.  The Executive and the Company hereby
acknowledge that the duties specified in Section 3.2 hereof are essential
to the Executive’s position and that Executive’s ability to perform those
duties is the essence of this Agreement.


 


7.3                               Notice of
Termination


 


Any termination by the Company or by the Executive during the
Employment Period shall be communicated by the Notice of Termination to the
other party given in accordance with Section 12 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 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.


 


7.4                               Date of
Termination


 


During the Employment Period, “Date of Termination”
means (a) if the Executive’s employment is terminated by reason of death,
at the end 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 


 


5

















 


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.


 


8.                                      Termination
Payments


 


In the event of termination of the Executive’s employment during the
Employment Period, all compensation and benefits set forth in this Agreement
shall terminate except as specifically provided in this Section 8.


 


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


 


If during the Employment Period 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 Annual Base
Salary through the Date of Termination to the extent not theretofore paid;


 


(ii)                                  the product of (x) the
Annual Performance Bonus payable with respect to the fiscal year in which the
Date of Termination occurs and (y) a fraction the numerator of which is
the number of days in the current fiscal year through the Date of Termination,
and the denominator of which is three hundred sixty-five (365);


 


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


 


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


 


(b)                                 for one year
after the Date of Termination or until the Executive qualifies for comparable
medical and dental insurance benefits from another employer, whichever occurs
first, the Company shall pay the Executive’s premiums for health insurance
benefit continuation for the Executive and the Executive’s family members, if
applicable, which 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”);


 


(c)                                  an amount as
severance pay equal to one (1) times the Annual Performance Bonus payable
with respect to the fiscal year in which the Date of Termination occurs;


 


6

















 


(d)                                 an amount as
severance pay equal to one (1) times the Annual Base Salary for the fiscal
year in which the Date of Termination occurs; and


 


(e)                                  immediate
vesting of all outstanding stock options previously granted to the Executive by
the Company.


 


8.2                               Termination for
Cause or Other Than for Good Reason


 


If during the Employment Period 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 (a) the Annual Base Salary through the Date of Termination, (b) 
the amount of any compensation previously deferred by the Executive in
accordance with the terms of the Company’s deferred compensation program, and (c) any
accrued vacation pay that would be payable under the Company’s standard policy,
in each case to the extent theretofore unpaid.


 


8.3                               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, other than the Company’s
obligation to pay the Executive the product of (a) the Annual Performance
Bonus payable with respect to the fiscal year in which the Term expired and (b) a
fraction the numerator of which is the number of days in the current fiscal
year through the end of the Term and the denominator of which is three hundred
sixty-five (365).  Such payment will be
made in the fiscal year following the fiscal year in which the Term expired no
later than the fifteenth day of the third month of such subsequent fiscal year.


 


8.4                               Termination
Because of Death or Total Disability


 


If during the Employment Period 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.


 


8.5                               Payment
Schedule


 


All payments of Accrued Obligations, or any portion thereof payable
pursuant to this Section 8, other than deferred compensation pursuant to Section 8.1(a)(iii),
shall be made to the Executive within ten (10) working days of the Date of
Termination.  Deferred compensation
pursuant to Section 8.1(a)(iii) shall be payable pursuant to the
terms of the deferred compensation program. 
Any payments payable to the Executive pursuant to 


 


7

















 


Section 8.1(c) and (d) hereof
shall be made to the Executive in a lump sum within ten (10) working
days of the Date of Termination.  For
purposes of determining the payment schedule, other than for deferred
compensation pursuant to Section 8.1(a)(iii), to the extent that the
payment schedule in this Section 8.5 would subject payments to the
distribution requirements set forth in Section 409A(a)(2) of the
Internal Revenue Code of 1986, as amended (“Code”), because the Date of
Termination is different than the date that a person would be deemed to have
had a separation from service within the meaning of Code Section 409A(a)(2)(i),
the Date of Termination shall be treated as the latest date so as to not
subject such payments to the distribution requirements set forth in Code Section 409A(a)(2).  Notwithstanding the preceding provisions of
this Section 8, if necessary to meet the requirements of subparagraphs (A)(i)
and (B)(i) of Code Section 409A(a)(2), the amounts that would normally be
paid during the first six months after the Executive’s separation from service
within the meaning of Code Section 409A(a)(2) shall not be paid to an
Executive who is a specified employee (as defined in Code Section 409A(a)(2)(B)(i) in
accordance with the procedures established by the Compensation Committee) until
the six-month anniversary of the Executive’s separation from service.


 


8.6                               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, all reasonably consistent with
the duties described in Section 3.2 hereof;


 


(b)                                 persistent
failure to carry out any lawful duties of the Executive described in Section 3.2
hereof or any directions of the Board or senior management reasonably
consistent with the duties herein set forth to be performed by the Executive,
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 11 hereof.


 


8

















 


8.7                               Good Reason


 


For purposes of this Agreement, “Good Reason” means


 


(a)                                  the assignment
to the Executive of any duties materially inconsistent with the Executive’s
position, authority, duties or responsibilities as contemplated by Section 3.2
hereof 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;


 


(b)                                 any failure by
the Company to comply with any of the provisions of Section 5 or Section 6
hereof, other than an isolated and inadvertent failure 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 other than that
described in Section 3.3 hereof;


 


(d)                                 any failure by
the Company to comply with and satisfy Section 13 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 13
hereof; or


 


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


 


provided, however, that the Executive has notified the Company of such
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 11 hereof.


 


8.8                               Excess
Parachute Limitation


 


If any portion of the payments or benefits for the Executive under this
Agreement, the Severance Agreement, or any other agreement or benefit plan of
the Company (including stock option plan) 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 Section 4999
of the Code 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 acceptable to the Executive.  Without limitation on the foregoing, the
payments made pursuant to this


 


9

















 


Section 8.8 shall be made no later than
the end of the year following the year in which the Executive remits such
excise tax to the IRS.


 


8.9                               Release


 


As a condition to receiving the payments and benefits under this Section 8,
the Executive shall execute a general release and waiver of all claims against
the Company, which release and waiver shall be in a form acceptable to the
Company, in its reasonable discretion, and delivered to the Company no later
than the fifteenth day of the third month of the fiscal year following the year
in which the Date of Termination occurs.


 


9.                                      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:


 


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


 


9.2                               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 agreement or obligations by which the Executive may be bound.


 


10.                               Nondisclosure;
Return of Materials


 


10.1                        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 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 compensation, granting the
Executive any promotions or raises, or entrusting the Executive with any information
that helps the Company compete with others.


 


10

















 


10.2                        Return of
Materials


 


All documents, records, notebooks, notes, memoranda, drawings or other
documents made or compiled by the Executive at any time, 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.


 


11.                               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 8.6
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.


 


12.                               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:


 


	
  If to the Executive:

  	
  David Karlin

  
	
   

  	
  [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, 48th
  Floor

  
	
   

  	
  Seattle, Washington
  98101-3099

  
	
   

  	
  Attn: James R. Lisbakken

  



 


Except as set forth in Section 7.4 hereof, if
notice is mailed, such notice shall be effective upon mailing.


 


11

















 


13.                               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 successor to its business and/or assets as aforesaid that assumes and
agrees to perform this Agreement by operation of law, or otherwise.  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.


 


14.                               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.


 


15.                               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.


 


16.                               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.


 


12

















 


17.                               Arbitration;
Attorneys’ Fees


 


Except in connection with enforcing Section 10 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 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 to 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 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.


 


18.                               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 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.


 


19.                               Entire
Agreement


 


This Agreement supersedes and replaces the Original Agreement, and
except as described in Section 23 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


 


13

















 


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
Company and the Executive shall continue in full force and effect to the extent
not superseded by Section 10 hereof.


 


20.                               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.


 


21.                               409A
Interpretation Provision


 


The Company
intends that this Agreement fully comply with the payout and other limitations
and restrictions imposed under Code Section 409A if and to the extent such
Code Section 409A is otherwise applicable to payments under this Agreement
and such compliance is necessary to avoid the penalties otherwise imposed under
Code Section 409A.  In this
connection, the Company and Executive agree that the payout timing provisions
and any other terms of this Agreement shall be interpreted and deemed modified,
if and to the extent necessary, to comply with the payout and other limitations
and restrictions imposed under Code Section 409A if and to the extent such
Code Section 409A is otherwise applicable to this Agreement and such
compliance is necessary to avoid the penalties otherwise imposed under Code Section 409A.


 


22.                               Counterparts


 


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


 


23.                               Coordination with
Severance Agreement


 


The Severance Agreement that the parties entered into provides for
certain forms of severance and benefit payments in the event of termination of
the Executive’s employment.  This
Agreement is in addition to the Severance Agreement and in no way supersedes or
nullifies the Severance Agreement. 
Nevertheless, it is possible that 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 8.1 hereof shall be coordinated with payments made to the
Executive under Section 5.1 of the Severance Agreement as follows:


 


(a)                                  Accrued
Obligations under this Agreement shall be paid first, in which case Accrued
Obligations need not be paid under the Severance Agreement;


 


(b)                                 COBRA
Continuation under this Agreement shall be provided first, in which case COBRA
Continuation need not be provided under the Severance Agreement; and


 


14

















 


(c)                                  the severance
payment required under Section 8.1(d) hereof shall be paid first, in
which case only that portion of any severance payment required under Section 5.1(c) of
the Severance Agreement that is in excess of the severance payment required
under Section 8.1(d) hereof shall be paid in accordance with the
provisions of the Severance Agreement.


 


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/ Caroline Loewy

  
	
   

  	
   

  	
  Name: Caroline Loewy

  
	
   

  	
   

  	
  Its:  Chief
  Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  EXECUTIVE

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David Karlin

  
	
   

  	
  Name:  David Karlin

  



 


15

















 


APPENDIX
A


 


For purposes of this Agreement, a “Change of Control”
shall mean:


 


(a)                                  A “Board Change” that, for purposes of this Agreement,
shall have occurred if a majority (excluding vacant seats) of the seats on the
Board are occupied by individuals who were neither (i) nominated by a
majority of the Incumbent Directors nor (ii) appointed by directors so
nominated.  An “Incumbent
Director” is a member of the Board who has been either (i) nominated
by a majority of the directors of the Company then in office or (ii) appointed
by directors so nominated, but excluding, for this purpose, any such individual
whose initial assumption of office occurs as a result of either an actual or
threatened election contest (as such terms are used in former Rule 14a-11
of Regulation 14A promulgated under the Securities Exchange Act of 1934,
as amended (the “Exchange Act”)) or other
actual or threatened solicitation of proxies or consents by or on behalf of a
Person (as hereinafter defined) other than the Board; or


 


(b)                                 The acquisition
by any individual, entity or group (within the meaning of Section 13(d)(3) or
14(d)(2) of the Exchange Act) (a “Person”) of
beneficial ownership (within the meaning of Rule 13d-3 promulgated under
the Exchange Act) of (i) twenty percent (20%) or more of either (A) the
then outstanding shares of Common Stock of the Company (the “Outstanding
Company Common Stock”) or (B) the combined voting power of
the then outstanding voting securities of the Company entitled to vote
generally in the election of directors (the “Outstanding
Company Voting Securities”), in the case of either (A) or (B) of
this clause (i), which acquisition is not approved in advance by a majority of
the Incumbent Directors, or (ii) thirty-three percent (33%) or more of
either (A) the Outstanding Company Common Stock or (B) the
Outstanding Company Voting Securities, in the case of either (A) or (B) of
this clause (ii), which acquisition is approved in advance by a majority of the
Incumbent Directors; provided, however, that the following acquisitions shall
not constitute a Change of Control:  (x) any
acquisition by the Company, (y) any acquisition by any employee benefit
plan (or related trust) sponsored or maintained by the Company or any
corporation controlled by the Company, or (z) any acquisition by any
corporation pursuant to a reorganization, merger or consolidation, if,
following such reorganization, merger or consolidation, the conditions
described in clauses (i), (ii) and (iii) of subsection (c) of
this Appendix A are satisfied; or


 


(c)                                  Approval by the
shareholders of the Company of a reorganization, merger or consolidation, in
each case, unless, immediately following such reorganization, merger or
consolidation, (i) more than sixty percent (60%) of, respectively, the
then outstanding shares of common stock of the corporation resulting from such
reorganization, merger or consolidation and the combined voting power of the
then outstanding voting securities of such corporation entitled to vote
generally in the election of directors is then beneficially owned, directly or
indirectly, by all or substantially all the individuals and entities who were


 

















 


the beneficial owners, respectively, of the
Outstanding Company Common Stock and the Outstanding Company Voting Securities
immediately prior to such reorganization, merger or consolidation in
substantially the same proportion as their ownership immediately prior to such
reorganization, merger or consolidation of the Outstanding Company Common Stock
and the Outstanding Company Voting Securities, as the case may be, (ii) no
Person (excluding the Company, any employee benefit plan (or related trust) of
the Company or such corporation resulting from such reorganization, merger or
consolidation and any Person beneficially owning, immediately prior to such
reorganization, merger or consolidation, directly or indirectly, thirty-three
percent (33%) or more of the Outstanding Company Common Stock or the
Outstanding Company Voting Securities, as the case may be) beneficially owns,
directly or indirectly, thirty-three percent (33%) or more of, respectively,
the then outstanding shares of common stock of the corporation resulting from
such reorganization, merger or consolidation or the combined voting power of
the then outstanding voting securities of such corporation entitled to vote
generally in the election of directors, and (iii) at least a majority of
the members of the board of directors of the corporation resulting from such
reorganization, merger or consolidation were the Incumbent Directors at the
time of the execution of the initial agreement providing for such
reorganization, merger or consolidation; or


 


(d)                                 Approval by the
shareholders of the Company of (i) a complete liquidation or dissolution
of the Company or (ii) the sale or other disposition of all or substantially
all the assets of the Company, other than to a corporation with respect to
which immediately following such sale or other disposition, (A) more than
sixty percent (60%) of, respectively, the then outstanding shares of common
stock of such corporation and the combined voting power of the then outstanding
voting securities of such corporation entitled to vote generally in the
election of directors is then beneficially owned, directly or indirectly, by
all or substantially all the individuals and entities who were the beneficial
owners, respectively, of the Outstanding Company Common Stock and the
Outstanding Company Voting Securities immediately prior to such sale or other
disposition in substantially the same proportion as their ownership, immediately
prior to such sale or other disposition, of the Outstanding Company Common
Stock and the Outstanding Company Voting Securities, as the case may be, (B) no
Person (excluding the Company, any employee benefit plan (or related trust) of
the Company or such corporation and any Person beneficially owning, immediately
prior to such sale or other disposition, directly or indirectly, thirty-three
percent (33%) or more of the Outstanding Company Common Stock or the
Outstanding Company Voting Securities, as the case may be) beneficially owns,
directly or indirectly, thirty-three percent (33%) or more of, respectively,
the then outstanding shares of common stock of such corporation and the
combined voting power of the then outstanding voting securities of such corporation
entitled to vote generally in the election of directors, and (C) at least
a majority of the members of the board of directors of such corporation were
approved by a majority of the Incumbent Directors at the time of the execution
of the initial agreement or action of the Board providing for such sale or
other disposition of the Company’s assets.


 


2