Document:

Exhibit 10.2

 

PONIARD PHARMACEUTICALS, INC.

KEY EXECUTIVE SEVERANCE AGREEMENT

 

This Key
Executive Severance Agreement (this “Agreement”), dated
as of February 1, 2008, is entered into by and between PONIARD
PHARMACEUTICALS, INC., a Washington corporation (as supplemented by Section 10,
the “Company”), and Robert L. De Jager (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 of the Executive’s productive time, ability,
attention and effort to the business and affairs of the Company and the
discharge of the responsibilities assigned to the Executive hereunder, and will
seek to perform faithfully and efficiently such responsibilities.  It shall not be a violation of this Agreement
for the Executive to (a) serve on corporate, civic or charitable boards or
committees, (b) deliver lectures, fulfill speaking engagements or teach at
educational institutions, (c) manage personal investments, or (d) engage
in activities permitted by the policies of the Company or as specifically
permitted by the Company, so long as such activities do not significantly
interfere with the performance of the Executive’s responsibilities in
accordance with this Agreement.  It is
expressly understood and agreed that to the extent any such activities have
been conducted by the Executive prior to the Term, the continued conduct of such
activities (or the conduct of activities similar in nature and scope thereto)
during the Term shall not thereafter be deemed to interfere with the
performance of the Executive’s responsibilities to the Company.

 

4.                                      Termination

 

During the
Term, employment of the Executive may be terminated as follows, but, in any
case, the nondisclosure provisions set forth in Section 7 hereof shall
survive the termination of this Agreement and the termination of the
Executive’s employment with the Company:

 

4.1                               By the Company or the Executive

 

At any time
during the Term, the Company may terminate the employment of the Executive with
or without Cause (as defined below), and the Executive may terminate the
Executive’s employment for Good Reason (as defined below) or for any reason,
upon giving Notice of Termination (as defined below).

 

4.2                               Automatic Termination

 

This Agreement
and the Executive’s employment shall terminate automatically upon the death or
Total Disability of the Executive.  The
term “Total Disability” as used
herein shall mean the Executive’s inability (with such accommodation as may be
required by law and which places no undue burden on the Company), as determined
by a physician selected by the Company and acceptable to the Executive, to
perform the Executive’s essential duties for a period or periods aggregating
twelve (12) weeks in any three hundred sixty-five (365) day period as a result
of physical or mental illness, loss of legal capacity or any other cause 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 the Executive’s
duties during such period.

 

5.                                      Termination Payments

 

In the event
of termination of the Executive’s employment during the Term, all compensation
and benefits shall terminate, except as specifically provided in this Section 5.

 

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

 

If during the
Term the Company terminates the Executive’s employment other than for Cause or
the Executive terminates the Executive’s employment for Good Reason, the
Executive shall be entitled to:

 

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

 

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

 

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

 

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

 

(b)           for nine (9) months after the
Date of Termination or until the Executive qualifies for comparable medical and
dental insurance benefits from another employer, whichever occurs first, the
Company shall pay the Executive’s premiums for health insurance benefit
continuation for the Executive and the Executive’s family members, if
applicable, that the Company provides to the Executive under the provisions of
the federal Consolidated Omnibus Budget Reconciliation Act of 1985, as amended
(“COBRA”), to the extent that the Company would have paid
such premiums had the Executive remained employed by the Company (such
continued payment is hereinafter referred to as “COBRA
Continuation”); and

 

(c)           an amount as severance pay equal to
seventy five percent (75%) of the Executive’s then current annual base salary
for the fiscal year in which the Date of Termination occurs, subject to payment
as set forth in Sections 5.5 and 5.9 hereof.

 

5.2                               Termination for Cause or Other Than for Good Reason

 

If during the
Term the Executive’s employment shall be terminated by the Company for Cause or
by the Executive for other than Good Reason, this Agreement shall terminate
without further obligation on the part of the Company to the Executive, in
accordance with the terms of the Company’s deferred compensation program, other
than the Company’s obligation to pay the Executive the Accrued Obligations to
the extent theretofore unpaid.

 

5.3                               Expiration of Term

 

In the event
the Executive’s employment is not terminated prior to expiration of the Term,
this Agreement shall terminate without further obligation on the part of the
Company to the Executive.

 

5.4                               Termination Because of Death or Total Disability

 

If the
Executive’s employment is terminated during the Term by reason of the
Executive’s death or Total Disability, this Agreement shall terminate
automatically without further obligation on the part of the Company to the
Executive or the Executive’s legal representatives under this Agreement, other
than the Company’s obligation to pay the Executive the Accrued Obligations
(which shall be paid to the Executive’s estate or beneficiary, as applicable in
the case of the Executive’s death) and to provide COBRA Continuation.

 

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5.5                               Payment Schedule

 

All payments
of Accrued Obligations, or any portion thereof payable pursuant to this Section 5,
other than deferred compensation pursuant to Section 5.1(a)(ii), shall be
made to the Executive within ten (10) working days of the Date of
Termination.  Deferred compensation
pursuant to Section 5.1(a)(ii) shall be payable pursuant to the terms
of the deferred compensation program. 
Any severance payments payable to the Executive pursuant to Section 5.1(c) shall
be made to the Executive in the form of salary continuation, payable at normal
payroll intervals during the nine (9) month period following the Date of
Termination (“Payment Period”).  For purposes of determining the payment
schedule, other than for deferred compensation pursuant to Section 5.1(a)(ii),
to the extent that the payment schedule in this Section 5.5 would subject
payments to the distribution requirements set forth in Section 409A(a)(2) of
the Internal Revenue Code of 1986, as amended (“Code”), because the Date of
Termination is different than the date that a person would be deemed to have
had a separation from service within the meaning of Code Section 409A(a)(2)(i),
the Date of Termination shall be treated as the latest date so as to not
subject such payments to the distribution requirements set forth in Code Section 409A(a)(2).  Notwithstanding the preceding provisions of
this Section 5, if necessary to meet the requirements of subparagraphs (A)(i) and
(B)(i) of Code Section 409A(a)(2), the amounts that would normally be
paid during the first six months after the Executive’s separation from service
within the meaning of Code Section 409A(a)(2) shall not be paid to an
Executive  who is a specified employee
(as defined in Code Section 409A(a)(2)(B)(i) in accordance with the
procedures established by the Compensation Committee) until the six-month
anniversary of the Executive’s separation from service.

 

5.6                               Cause

 

For purposes
of this Agreement, “Cause” means cause given by
the Executive to the Company and shall include, without limitation, the occurrence
of one or more of the following events:

 

(a)           a clear refusal to carry out any
material lawful duties of the Executive or any directions of the Board or
senior management of the Company reasonably consistent with those duties;

 

(b)           persistent failure to carry out any
lawful duties of the Executive or any directions of the Board or senior
management reasonably consistent with those duties; provided, however, that the
Executive has been given reasonable notice and opportunity to correct any such
failure;

 

(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;

 

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(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 written notice from
the Company or the Executive of the requirements of Section 10 hereof; or

 

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

 

provided,
however, that the Executive has notified the Company of such assignment,
failure, situation or violation within ninety (90) days of its occurrence and
there has been compliance with the notice and opportunity to cure requirements
of Section 8 hereof.

 

5.8                               General Release of Claims

 

As a condition
to the payment contemplated by this Section 5, the Executive shall execute
a general release and waiver of claims against the Company in a form
satisfactory to the Company in its sole discretion.  By way of example and not limitation, the
general release and waiver of claims will include any claims for wages,
bonuses, employment benefits, or damages of any kind whatsoever, arising out of
any contracts, express or implied, any

 

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covenant of good faith and fair
dealing, express or implied, any theory of wrongful discharge, any legal
restriction on the Company’s right to terminate employment, or any federal,
state or other governmental statute or ordinance, including, without
limitation, Title VII of the Civil Rights Act of 1964, the federal Age
Discrimination in Employment Act, the Americans with Disabilities Act, the
Family and Medical Leave Act, the Washington Law Against Discrimination, or any
other legal limitation on the employment relationship.  Such release and waiver shall be delivered to
the Company no later than the fifteenth day of the third month of the fiscal
year following the year in which the Date of Termination occurs.

 

5.9                               Dispute regarding existence of Good Reason for
Termination

 

In the event
the Company disputes whether Good Reason existed for the Executive to terminate
the Executive’s employment for Good Reason, the Company shall pay salary
continuation as provided in Section 5.5 until the earliest of (i) settlement
by the parties, (ii) determination by arbitration in accordance with Section 14
hereof that Good Reason did not exist, and (iii) completion of the
payments required by Section 5.5 and Section 5.1(c) hereof.  If, pursuant to Section 14 hereof, an
arbitrator determines that Good Reason did not exist, the arbitrator shall also
decide whether the Executive had a reasonable, good-faith basis for claiming
that there was Good Reason to terminate. 
If the arbitrator determines that there was not such a basis, the
Executive shall be obligated to repay promptly to the Company the salary
continuation payments; if the arbitrator determines that there was such a
basis, the Executive shall not be obligated to repay the salary continuation.

 

6.                                      Representations, Warranties and Other Conditions

 

In order to induce
the Company to enter into this Agreement, the Executive represents and warrants
to the Company as follows:

 

6.1                               Health

 

The Executive
is in good health and knows of no physical or mental disability that, with any
accommodation that may be required by law and that places no undue burden on
the Company, would prevent the Executive from fulfilling the Executive’s
obligations hereunder.  The Executive
agrees, if the Company requests, to submit to reasonable periodic medical
examinations by a physician or physicians designated, paid for and arranged by
the Company.  The Executive agrees that
the examination’s medical report shall be provided to the Company.

 

6.2                               No Violation of Other Agreements

 

The Executive
represents that neither the execution nor the performance of this Agreement by
the Executive will violate or conflict in any way with any other agreement or
obligations by which the Executive may be bound.

 

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7.                                      Nondisclosure; Return of Materials

 

7.1                               Nondisclosure

 

Except as required by the Executive’s employment with the Company, the
Executive will not, at any time during the term of employment by the Company,
or at any time thereafter, directly, indirectly or otherwise, use, communicate,
disclose, disseminate, lecture upon or publish articles relating to any
confidential, proprietary or trade secret information without the prior written
consent of the Company.  The Executive
understands that the Company will be relying on this covenant in continuing the
Executive’s employment, paying the Executive’s compensation, granting the
Executive any promotions or raises, or entrusting the Executive with any
information that helps the Company compete with others.

 

7.2                               Return of Materials

 

All documents, records, notebooks, notes, memoranda, drawings or other
documents made or compiled by the Executive at any time while employed by the
Company, or in the Executive’s possession, including any and all copies
thereof, shall be the property of the Company and shall be held by the
Executive in trust and solely for the benefit of the Company, and shall be
delivered to the Company by the Executive upon termination of employment or at
any other time upon request by the Company.

 

8.                                      Notice and Cure of Breach

 

Whenever a breach of this Agreement by either party is relied upon as
justification for any action taken by the other party pursuant to any provision
of this Agreement, other than clause (a), (b), (c) or (d) of Section 5.6
hereof, before such action is taken, the party asserting the breach of this
Agreement shall give the other party at least twenty (20) days’ prior written
notice of the existence and the nature of such breach before taking further
action hereunder and shall give the party purportedly in breach of this
Agreement the opportunity to correct such breach during the twenty (20) day
period.

 

9.                                      Form of Notice

 

Every notice required by the terms of this Agreement shall be given in
writing by serving the same upon the party to whom it was addressed personally
or by registered or certified mail, return receipt requested, at the address
set forth below or at such other address as may hereafter be designated by
notice given in compliance with the terms hereof:

 

	
  If to the Executive:

  	
   

  	
  Robert L. De Jager

  
	
   

  	
   

  	
  3611 Calle Juego

  
	
   

  	
   

  	
  Rancho Santa Fe, CA 92091

  

 

8

 

	
  If to the Company:

  	
   

  	
  Poniard Pharmaceuticals, Inc.

  
	
   

  	
   

  	
  7000 Shoreline Court, Suite 270

  
	
   

  	
   

  	
  South San Francisco, CA 94080

  
	
   

  	
   

  	
  Attn:  Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
  With a copy to:

  	
   

  	
  Perkins Coie LLP

  
	
   

  	
   

  	
  1201 Third
  Avenue, 48th Floor

  
	
   

  	
   

  	
  Seattle,
  Washington 98101-3099

  
	
   

  	
   

  	
  Attn:  James
  R. Lisbakken

  

 

Except as set forth in Section 4.4 hereof, if
notice is mailed, such notice shall be effective upon mailing.

 

10.                               Assignment

 

This Agreement is personal to the Executive and shall not be assignable
by the Executive.

 

The Company shall assign to and require any successor (whether direct
or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all the business and/or assets of the Company to assume expressly
and agree to perform this Agreement in the same manner and to the same extent
that the Company would be required to perform it if no such succession had
taken place.  As used in this Agreement,
the “Company” shall mean Poniard Pharmaceuticals, Inc.
and any affiliated company or successor to its business and/or assets as
aforesaid that assumes and agrees to perform this Agreement by contract,
operation of law or otherwise; and as long as such successor assumes and agrees
to perform this Agreement, the termination of the Executive’s employment by one
such entity and the immediate hiring and continuation of the Executive’s
employment by the succeeding entity shall not be deemed to constitute a
termination or trigger any severance obligation under this Agreement.  All the terms and provisions of this
Agreement shall be binding upon and inure to the benefit of and be enforceable
by the parties hereto and their respective successors and permitted assigns.

 

11.                               Waivers

 

No delay or failure by any party hereto in exercising, protecting or
enforcing any of its rights, titles, interests or remedies hereunder, and no
course of dealing or performance with respect thereto, shall constitute a
waiver thereof.  The express waiver by a
party hereto of any right, title, interest or remedy in a particular instance
or circumstance shall not constitute a waiver thereof in any other instance or
circumstance.  All rights and remedies
shall be cumulative and not exclusive of any other rights or remedies.

 

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

 

9

 

event be effective unless the same shall be in writing, specifically
identifying this Agreement and the provision intended to be amended, modified,
waived, terminated or discharged and signed by the Company and the Executive,
and each such amendment, modification, waiver, termination or discharge shall
be effective only in the specific instance and for the specific purpose for
which given.  No provision of this
Agreement shall be varied, contradicted or explained by any oral agreement,
course of dealing or performance or any other matter not set forth in an
agreement in writing and signed by the Company and the Executive.

 

13.                               Applicable Law

 

This Agreement shall in all respects, including all matters of
construction, validity and performance, be governed by, and construed and
enforced in accordance with, the laws of the State of Washington, without
regard to any rules governing conflicts of laws.

 

14.                               Arbitration; Attorneys’ Fees

 

Except in connection with enforcing Section 7 hereof, for which
legal and equitable remedies may be sought in a court of law, any dispute
arising under this Agreement shall be subject to arbitration.  The arbitration proceeding shall be conducted
in accordance with the Commercial Arbitration Rules of the American
Arbitration Association (the “AAA Rules”) then
in effect, conducted by one (1) arbitrator either mutually agreed upon or
selected in accordance with the AAA Rules. 
The arbitration shall be conducted in King County, Washington, under the
jurisdiction of the Seattle office of the American Arbitration
Association.  The arbitrator shall have
authority only to interpret and apply the provisions of this Agreement, and
shall have no authority to add to, subtract from or otherwise modify the terms
of this Agreement.  Any demand for
arbitration must be made within sixty (60) days of the event(s) giving
rise to the claim that this Agreement has been breached.  The arbitrator’s decision shall be final and
binding, and each party agrees to be bound by the arbitrator’s award, subject
only to an appeal therefrom in accordance with the laws of the State of
Washington.  Either party may obtain
judgment upon the arbitrator’s award in the Superior Court of King County,
Washington.

 

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

 

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

 

10

 

full extent permitted by law, (a) all other provisions hereof
shall remain in full force and effect in such jurisdiction and shall be
liberally construed in order to carry out the intent of the parties hereto as
nearly as may be possible, (b) such invalidity, illegality or
unenforceability shall not affect the validity, legality or enforceability of any
other provision hereof, and (c) any court or arbitrator having
jurisdiction thereover shall have the power to reform such provision to the
extent necessary for such provision to be enforceable under applicable law.

 

16.                               Coordination With Change of Control Agreement

 

The Company and the Executive are 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 if a
severance payment is made under Section 8.1(d) of the Change of
Control Agreement.

 

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 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

 

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made pursuant to this Section 17 shall be made no later than the
end of the year following the year in which the Executive remits such excise
tax to the IRS.

 

18.                               Entire Agreement

 

Except as described in Section 16 hereof, this Agreement
constitutes the entire agreement between the Company and the Executive with
respect to the subject matter hereof, and all prior or contemporaneous oral or
written communications, understandings or agreements between the Company and
the Executive with respect to such subject matter, are hereby superseded and
nullified in their entireties, except that the Proprietary Information and
Invention Agreement between the Executive and the Company shall continue in
full force and effect to the extent not superseded by Section 10 hereof.

 

19.                               Withholding

 

The Company may withhold from any amounts payable under this Agreement
such federal, state or local taxes as shall be required to be withheld pursuant
to any applicable law or regulation.

 

20.                               409A Interpretation Provision

 

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

 

21.                               Counterparts

 

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

 

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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/Gerald
  Mc Mahon

  	
   

  
	
   

  	
   

  	
  Name:  Gerald
  McMahon

  
	
   

  	
   

  	
  Its:        Chairman &
  CEO

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  EXECUTIVE

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Rober L. De Jager

  	
   

  
	
   

  	
   

  	
  Name:
   Robert L. De Jager

  

 

13Exhibit
10.3

 

[On Poniard Letterhead]

 

January 29, 2008

 

Robert L. De Jager, M.D., F.A.C.P.

3611 Calle Juego

Rancho Sante Fe, CA 92091

 

Dear Robert:

 

It is with great pleasure that Poniard
Pharmaceuticals, Inc. offers you the position of Chief Medical Officer,
reporting to me as Chairman and Chief Executive Officer.  Your start date
will be February 1, 2008 and your annual base salary is $345,000, which
will be paid semi-monthly.

 

You will be eligible for an annual bonus of up to 30% (target) of your
annual base salary, at the discretion of the Compensation Committee of the
Board of Directors.  Your annual bonus eligibility for 2008 will be
prorated from the date you commence employment.

 

You will also be eligible for the standard severance and change of control
agreements currently being offered to company Vice Presidents.

 

If you accept this offer of employment, you will be granted a stock
option to purchase 100,000 shares of Poniard common stock pursuant to the terms
of the company’s 2004 Incentive Compensation Plan (“Plan”), which grant will be
effective upon your first day of employment and the exercise price will be
equal to the closing price of Poniard common stock on the day of grant, i.e.,
your first day of employment.  The stock option will vest 25% after the
end of one year and the balance will vest in equal monthly amounts over the
next three years.  In addition, if in the good faith determination of the
Equity Awards Subcommittee, the following events occur within the timeframe
indicated, you will be eligible to receive additional stock options to purchase
shares of Poniard common stock pursuant to the terms of the Plan (with the same
vesting schedule from the date of grant as provided for in your initial grant)
as follows:  (a) completion of patient enrollment under the company’s
current Phase III clinical trial for SCLC by the end of Q3 2008 – option for
25,000 shares;  (b) delivery of top-line response data under the
company’s current Phase II clinical trial for CRC by the end of Q4 2008 –
option for 25,000 shares; and (c) delivery of top-line survival data under
the company’s current Phase III clinical trial for SCLC by the end of Q4 2008 –
option for 25,000 shares.  Any such options will have an exercise price
equal to the closing price of Poniard common stock on the effective date of
grant by the Equity Awards Subcommittee.

 

All new employees must provide documentation of eligibility to work in
the United States.  A copy of the federal government’s I-9 form is
enclosed which lists the type of documentation necessary to meet this
requirement.  Please bring this form and appropriate documentation with
you on your first day of work.

 

You are eligible to participate in Poniard’s insured benefits on the
first day of employment.  The company pays the full cost of participation
by employees, spouses/partners and dependent children in our comprehensive
medical, dental and vision plans.   As an employee, you will also be
covered under Poniard’s term life insurance, term accidental death and dismemberment
insurance and Long Term Disability Plan.  The company also has a 401(k) Plan
and matches 5%

 

 

of the employee’s contribution up to a maximum of $500. Employees are
immediately vested in the company match.

 

Poniard observes 10 holidays, plus employees receive three personal
holidays to use during the calendar year (these days are pro-rated for
individuals who start after the first quarter of the calendar year).  Your
personal holidays must be used by December 31 of each year.  Vacation
hours are calculated using the employee’s start date through a continuous
12-month period of employment.  Full-time employees earn 10.00 hours of
vacation time per month up to a maximum of 120 hours per year.

 

Poniard has an at-will relationship with each of its employees. 
That means that either the company or you can terminate the employment
relationship at any time, for any reason deemed appropriate.  No manager
or officer of Poniard is authorized to alter the at-will relationship unless it
is done in writing and signed by the Chief Executive Officer.

 

Please indicate your acceptance of this offer by signing below. 
The enclosed Invention and Proprietary Information Agreement (a copy of this
document is enclosed for your records) must be returned/signed on your first
day of work.  Our offer is contingent upon the signing of the Invention
and Proprietary Information Agreement in addition to satisfactory clearance of
the background screen.  Please return the signed offer letter and
background release form by January 29, 2008.  If you have any questions, please feel free
to call me.

 

Poniard has an exciting future and we believe your contributions will
have a positive effect on our success.  We look forward to having you join
us.

 

Sincerely,

 

 

	
  /s/ Jerry Mc Mahon,

  	
   

  	
   

  
	
  Jerry McMahon, Ph.D.

  	
   

  
	
  Chairman and Chief Executive Officer

  	
   

  

 

Enclosures

 

I have read and accept the terms and
conditions of employment as outlined above.

 

 

	
  /s/ Robert L. De Jager

  	
   

  	
  Janaury 29, 2008

  	
   

  
	
  Robert L. De Jager, M.D.,
  F.A.C.P.

  	
  Date

  

 

2

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