Document:

Exhibit 10.22

PONIARD PHARMACEUTICALS, INC.

KEY EXECUTIVE SEVERANCE AGREEMENT

This Key Executive
Severance Agreement (VP) (this “Agreement”), dated
as of 

May 7, 2007, is entered into by and between PONIARD PHARMACEUTICALS, INC., a
Washington corporation (as supplemented by Section 10, the “Company”), and Ronald A. Martell (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; 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 his productive time, ability, attention
and effort to the business and affairs of the Company and the discharge of the
responsibilities assigned to him 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 his
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 beyond
the Executive’s control, unless the Executive is granted a leave of absence by
the Board.

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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 his 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 his employment for Good Reason, the
Executive shall be entitled to:

(a)           receive payment of the following
accrued obligations (the “Accrued Obligations”):

(i)            the Executive’s then current annual
base salary through the Date of Termination to the extent not theretofore paid;
and

(ii)           any compensation previously deferred
by the Executive (together with accrued interest or earnings thereon, if any)
and any accrued vacation pay that would be payable under the Company’s standard
policy, in each case to the extent not theretofore paid;

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(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 his 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 his 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.

5.5          Payment Schedule

All
payments of Accrued Obligations, or any portion thereof payable pursuant to
this Section 5, shall be made to the Executive within ten (10) working
days of the Date of Termination.  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”).

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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;

(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 the 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 will be 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 

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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, subject to the notice and
opportunity to cure requirements of Section 8 hereof.

5.8          General Release of Claims

As a
condition to the payment contemplated by Section 5.1(c), the Executive shall
execute a general release 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 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.

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 his 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 him from fulfilling his 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.

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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 by which the Executive may be bound.

7.           Nondisclosure; Return of Materials

7.1          Nondisclosure

Except
as required by his 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 his compensation, granting him any promotions or raises, or entrusting
him 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 his 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:

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  If to the Executive:

  	
   

  	
  Ronald A.
  Martell

  
	
   

  	
   

  	
  49 Wisteria Way

  
	
   

  	
   

  	
  Basking Ridge,
  New Jersey 07920

  
	
   

  	
   

  	
   

  
	
  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, 40th 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.

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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.

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 

 9
 

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 contemporaneously with this Agreement entering
into a 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 need not be paid during the first six
(6) months of the Payment Period if a severance payment is made under
Section 8.1(d) of the Change of Control Agreement; provided that the
remaining one-third balance of the severance payment required under
Section 5.1(c) hereof shall be paid during the Payment Period as provided
herein.

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
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
he 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.

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18.         Entire Agreement

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.         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.

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/
  GERALD MCMAHON

  	
   

  
	
   

  	
   

  	
  Name: Gerald
  McMahon, Ph.D.

  
	
   

  	
   

  	
  Its: Chairman,
  President and CEO

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  EXECUTIVE

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/
  RONALD A. MARTELL

  	
   

  
	
   

  	
   

  	
   

  
	
  :

  	
  Name 

  	
  Ronald A.
  Martell

  
	
   

  	
   

  	
   

  
						

 

 11Exhibit 10.23

PONIARD PHARMACEUTICALS,
INC.

CHANGE OF CONTROL AGREEMENT

This Change of Control Agreement (VP) (this “Agreement”),
dated as of May 7, 2007, is entered into by and between PONIARD
PHARMACEUTICALS, INC., a Washington corporation (as supplemented by
Section 13, the “Company”),
and Ronald A. Martell (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           “Severance Agreement” shall mean the 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 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 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.

 2
 

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 his productive time, ability, attention and effort
to the business and affairs of the Company and the discharge of the
responsibilities assigned to his hereunder, and will use his 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 her, 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 bonus (the “Annual 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 (including by reason of any
deferral and including the value of any stock awards and the compensation
expense disclosed in the Company’s financial statements for the grant of any
stock options) to the Executive by the Company and its affiliated companies in
respect of the three fiscal years immediately preceding the fiscal year in
which the Change of Control Date occurs. 
Each Annual Bonus shall be paid no later 

 3
 

than ninety (90) days after the end of the fiscal
year for which the Annual Bonus is awarded, unless the Executive shall elect to
defer the receipt of the Annual Bonus.

6.           Benefits

6.1          Incentive, Retirement and Welfare
Benefit Plans; Vacation

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

During the Employment Period, the Executive shall be
entitled to receive prompt reimbursement for all reasonable employment expenses
incurred by him 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.

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          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 his 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 

 4
 

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 may, upon notice to the Executive and
without reducing the Executive’s compensation during such period, excuse the
Executive from any or all of his 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 his employment for Good Reason, the Executive shall be entitled to:

 5
 

(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
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); provided that, in the event that the
Executive is entitled to an amount in respect of the Annual Bonus under
Section 8.1(c), he shall receive the amount payable under
Section 8.1(c) first and the amount payable under this
Section 8.1(a)(ii) only to the extent it exceeds the amount payable under
Section 8.1(c); and

(iii)          any compensation previously deferred
by the Executive (together with accrued interest or earnings thereon, if any)
and 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 his 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 equal to fifty percent (50%) of the Annual Bonus that would have been
paid to the Executive for the fiscal year in which the Date of Termination
falls but for the termination of the Executive’s employment;

(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 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, and (c) any accrued vacation pay that would be
payable under the Company’s standard policy, in each case to the extent
theretofore unpaid.

 6
 

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 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).

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 his 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, shall be made to the Executive
within ten (10) working days of the Date of Termination.  Any payments payable to the Executive
pursuant to 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.

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;

 7
 

(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, subject to 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 he 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 

 8
 

in writing by recognized tax counsel selected by the Company and
reasonably acceptable to the Executive.

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 him from
fulfilling his 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 by which the Executive may be bound.

10.         Nondisclosure; Return of Materials

10.1        Nondisclosure

Except as required by his 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 him compensation, granting him
any promotions or raises, or entrusting hin 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 his 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.

 9
 

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:

  	
   

  	
  Ronald A. Martell

  
	
   

  	
   

  	
  49 Wisteria Way

  
	
   

  	
   

  	
  Basking Ridge, New Jersey 07920

  
	
   

  	
   

  	
   

  
	
  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, 40th 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.

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 

 10
 

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.

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.

 11
 

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.

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

Except as described in Section 22 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 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.         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.

22.         Coordination with Severance Agreement

The Severance Agreement that the parties are
entering into contemporaneously with this Agreement 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 

 12
 

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

(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 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.

 13
 

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/ GERALD MCMAHON

  
	
   

  	
   

  	
  Name: Gerald McMahon, Ph.D.

  
	
   

  	
   

  	
  Its: Chairman, President and CEO

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  EXECUTIVE

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ RONALD A. MARTELL

  
	
   

  	
   

  	
  Name: Ronald A. Martell

  

dr

 14

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 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

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