Exhibit 10.29


 


Level 3 –
Amended & Restated


 


PONIARD PHARMACEUTICALS, INC.

AMENDED AND RESTATED

CHANGE OF CONTROL AGREEMENT


 


This Amended and Restated
Change of Control Agreement (this “Agreement”), dated as of February 24,
2009, is entered into by and between PONIARD PHARMACEUTICALS, INC., a
Washington corporation (as supplemented by Section 13 hereof, the “Company”), and JANET
R. REA (the “Executive”)
to reflect amendments made in December, 2008.


 


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 July 7, 2008,
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 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 at least ninety (90) days
prior to the end of the Initial Term or any Renewal Term; and provided,
further, that if a Change of 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
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.


 


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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.


 


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


 


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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:


 


7.1          Termination 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 a 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


 


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


 


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.


 


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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)           have the Company pay,
for one (1) 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 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”);


 


(c)           an amount as severance
pay equal to fifty percent (50%) of the Annual Performance Bonus payable with
respect to the fiscal year in which the Date of Termination occurs;


 


(d)           an amount as severance
pay equal to fifty percent (50%) of 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


 


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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) hereof,
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) hereof shall be payable pursuant to
the terms of the deferred compensation program. 
Any severance payments payable to the Executive pursuant to Sections 8.1(c) and
8.1(d) hereof shall be made to the Executive in a lump sum within
ten (10) working days of the Date of Termination.  Notwithstanding the preceding provisions of this Section 8, if any payment or
benefit pursuant to this Agreement constitutes a “deferral of compensation”
subject to Code Section 409A (after taking into account, to the maximum
extent possible, any applicable exemptions) (a “409A
Payment”) treated as payable to a Specified Employee (as defined
in Section 21.1 hereof) upon Separation from Service, the provisions of Section 21.1
hereof shall apply.  Section 8.9
hereof must be satisfied to receive payments and benefits under this Agreement.


 


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:


 


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(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.


 


8.7          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.


 


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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 a 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 Code Section 4999
as a result of such characterization, such excise tax to be paid to the
Executive at least ten (10) days prior to the date that the Executive is
obligated to make the excise tax payment. 
The determination of whether and to what extent any payments or benefits
would be “excess parachute payments” and the date by which any excise tax shall
be due shall be determined in writing by recognized tax counsel selected by the
Company and reasonably acceptable to the Executive.  Without limitation on the foregoing, the
payments made pursuant to this 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 Internal Revenue Service.


 


8.9          General Release of
Claims


 


As a condition to receiving the
payments and benefits under this Section 8 other than Accrued Obligations
set forth in Sections 8.1(a)(i) and 8.1(a)(iv) hereof, the Executive
shall execute (and not later revoke) a general release and waiver of all claims
against the Company, which release and waiver shall be in a form acceptable to
the Company, in its reasonable discretion, and delivered to the Company no
later than the seventh day of the third month of the fiscal year following the
year in which the Date of Termination occurs. 
To the extent any payment or benefit is a 409A Payment, the provisions
of Section 21.3 hereof shall apply.


 


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 each
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 agreements or
obligations by which the Executive may be bound.


 


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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 of the Company without the prior written consent of the Company.  The Executive understands that the Company
will be relying on this Agreement in continuing the Executive’s employment,
paying the Executive’s compensation, granting the Executive any promotions or
raises, or entrusting the Executive with any information that helps the Company
compete with others.


 


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:

  	
  Janet R. Rea

  
	
   

  	
  9815-21st
  Avenue NW

  
	
   

  	
  Seattle,
  Washington 98117

  
	
   

  	
   

  
	
  If to the Company:

  	
  Poniard
  Pharmaceuticals, Inc.

  
	
   

  	
  300 Elliott
  Avenue West, Suite 500

  
	
   

  	
  Seattle,
  Washington 98119

  
	
   

  	
  Attn: Chief
  Executive Officer

  



 


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  With a copy to:

  	
  Perkins Coie
  LLP

  
	
   

  	
  1201 Third
  Avenue, Suite 4800

  
	
   

  	
  Seattle,
  Washington 98101-3099

  
	
   

  	
  Attn: James
  R. Lisbakken

  



 


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


 


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 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.


 


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.


 


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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.


 


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 by the arbitrator’s
award, subject only to an appeal therefrom in accordance with the laws of the State
of Washington.  Either party may obtain
judgment upon the arbitrator’s award in the Superior Court of King County,
Washington.


 


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


 


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


 


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


 


21.1        Payments to Specified
Employees


 


To the extent that any payment or benefit pursuant
to this Agreement constitutes a 409A Payment treated as payable upon Separation
from Service, then, if on the date of the Executive’s Separation from Service,
the Executive is a Specified Employee, then to the extent required for the
Executive not to incur additional taxes pursuant to Code Section 409A, no
such 409A Payment shall be made to the Executive earlier than the earlier of (a) six
(6) months after the Executive’s Separation from Service or (b) the
date of the Executive’s death.  Should
this Section 21 result in the delay of benefits, any such benefit shall be
made available to the Executive by the Company during such delay period at the
Executive’s expense.  Should this Section 21.1
result in a delay of payments or benefits to the Executive, on the first day
any such payments or benefits may be made without incurring additional tax
pursuant to Code Section 409A (the “409A Payment Date”),
the Company shall make such payments and provide such benefits as provided for
in this Agreement, provided that any amounts that would have been payable
earlier but for the application of this Section 21.1 as well as
reimbursement of the amount the Executive paid for benefits pursuant to the
preceding sentence, shall be paid in a lump sum on the 409A Payment Date.  For purposes of this Section 21.1, the
term “Specified Employee” shall
have the meaning set forth in Code Section 409A, as determined in
accordance with the methodology established by the Company.


 


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21.2        Reimbursements


 


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


 


21.3        Release


 


Subject to Section 21.1 hereof, (a) to
the extent that the Executive is required to execute and deliver a release to
receive a 409A Payment and (b) this Agreement provides for such 409A
Payment to be provided prior to the 55th day following the Executive’s
Separation from Service, such 409A Payment will be provided upon the 55th day
following the Executive’s Separation from Service, provided that the release in
the form acceptable to the Company, in its reasonable discretion, has been
executed, delivered and effective prior to such time.  To the extent there is a delay in providing a
409A Payment because of the provisions of this Section 21.3, interest for
the delay and the opportunity for the Executive to pay for benefits in the
interim with subsequent reimbursement from the Company shall be provided in a
manner consistent with that set forth in Section 21.1 hereof.  If a release is required for a 409A Payment
and such release is not executed, delivered and effective by the 55th day
following the Executive’s Separation from Service, such 409A Payment shall not
be provided to the Executive to the extent that providing such 409A Payment
would cause such 409A Payment to fail to comply with Code Section 409A.


 


21.4        No Acceleration; Separate
Payments


 


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


 


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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;


 


(c)           the severance payment required under Section 8.1(d) hereof
shall be paid first in connection with a Change of Control that constitutes a
change in ownership or effective control of the Company or in the ownership of
a substantial portion of the assets of the Company within the meaning of
subsection (a)(2)(A)(v) of Code Section 409A, 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; and


 


(d)           the severance payment required under Section 8.1(d) hereof
(and paid pursuant to Section 8.5 hereof) need not be paid to the extent a
severance payment is made under Section 5.1(c) of the Severance
Agreement in connection with a Change of Control that does not constitute a
change in ownership or effective control of the Company or in the ownership of
a substantial portion of the assets of the Company within the meaning of
subsection (a)(2)(A)(v) of Code Section 409A, i.e., the credit from Section 5.1(c) of
the Severance Agreement is applied to the amount due under Section 8.1(d) hereof
and therefore only that portion of any severance payment required under Section 8.1(d) hereof
that is in excess of the total severance payment required under Section 5.1(c) of
the Severance Agreement shall be paid in accordance with the provisions of this
Agreement.


 


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


 


 


	
   

  	
  PONIARD PHARMACEUTICALS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Anna
  Wight

  
	
   

  	
   

  	
  Name:

  	
  Anna Wight

  
	
   

  	
   

  	
  Its:

  	
  VP, Legal

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  EXECUTIVE

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Janet R.
  Rea

  
	
   

  	
   

  	
  Name: Janet
  R. Rea

  



 


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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 subclause (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 subclause (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
or 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.


 


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