Document:

Exhibit 10.20

 

PONIARD PHARMACEUTICALS, INC.

AMENDED AND RESTATED

CHANGE OF CONTROL AGREEMENT (CEO)

 

This Amended and Restated
Change of Control Agreement (CEO) (this “Agreement”), dated as of March 3, 2008,
is entered into by and between PONIARD PHARMACEUTICALS, INC., a Washington
corporation (formerly known as NeoRx Corporation and as supplemented by Section 13,
the “Company”),
and GERALD MCMAHON (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           “Offer Letter” shall mean the offer letter
dated April 26, 2004 establishing Executive’s employment with the Company.

 

1.5           “Original Agreement” shall mean the Change of
Control Agreement, dated as of May 11, 2004, between the parties, as
attached to the Offer Letter.

 

1.6           “Severance Agreement” shall mean the Amended
and Restated Key Executive Severance Agreement, dated as of the date hereof,
between the parties, as it may be

 

 

amended from time to
time, that provides for certain benefits related to termination of the
Executive’s employment that are unrelated to a Change of Control.

 

2.                                      Term

 

The initial term of this
Agreement (“Initial Term”)
shall be for a period of two (2) years from the date of this Agreement as
first appearing above; provided, however, that this Agreement shall
automatically renew for successive additional two (2) 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

 

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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.

 

4.                                      Attention and Effort

 

During the Employment
Period, and excluding any periods of vacation and sick leave to which the
Executive is entitled, the Executive will devote all of the Executive’s
productive time, ability, attention and effort to the business and affairs of
the Company and the discharge of the responsibilities assigned to the Executive
hereunder, and will use the Executive’s reasonable best efforts to perform
faithfully and efficiently such responsibilities.  It
shall not be a violation of this Agreement for the Executive to hold board of
director positions with outside civic organizations or to spend a reasonable
amount of time fulfilling the duties of those positions, or to engage in other
outside activities permitted by the policies of the Company or as specifically
permitted by the Board, so long as such activities do not interfere with the
performance of the Executive’s duties hereunder.  Service on a board of directors for a
commercial entity will be subject to prior approval of the Board; however, the
Company acknowledges and agrees that the Executive has previously disclosed the
Executive’s appointment to the board of directors of Trellis Bioscience, Inc.  It is expressly understood and agreed that
such activities specifically approved or acquiesced in during the Employment
Period shall not be deemed to interfere with the performance of the Executive’s
responsibilities to the Company.

 

5.                                      Compensation

 

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

 

5.1          Salary

 

The Executive shall
receive an annual base salary (the “Annual Base Salary”), at least equal to the
annual salary established by the Board or the Compensation Committee of the
Board (the “Compensation
Committee”) 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 shall
review the Annual Base Salary at 

 

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least annually and shall determine in good faith and
consistent with any generally applicable Company policy any increases for
future years.

 

5.2          Bonus

 

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

 

6.                                      Benefits

 

6.1          Incentive,
Retirement and Welfare Benefit Plans; Vacation

 

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

 

6.2          Expenses

 

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

 

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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 and
certain obligations under the Invention Agreement (as defined in Section 10.3
hereof) and the Offer Letter 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 the
Executive’s employment for Good Reason (as defined below) or for any reason,
upon giving the Notice of Termination (as defined below).

 

7.2          Automatic
Termination

 

This Agreement and the
Executive’s employment during the Employment Period shall terminate
automatically upon the death or Total Disability of the Executive.  The term “Total Disability” as used herein shall
mean the Executive’s inability (with such accommodation as may be required by
law and which places no undue burden on the Company), as determined by a
physician selected by the Company and acceptable to the Executive, to perform
the duties set forth in Section 3.2 hereof for a period or periods
aggregating twelve (12) weeks in any three hundred sixty-five (365) day period
as a result of physical or mental illness, loss of legal capacity or any other
cause beyond the Executive’s control, unless the Executive is granted a leave
of absence by the Board.  The Executive
and the Company hereby acknowledge that the duties specified in Section 3.2
hereof are essential to the Executive’s position and that Executive’s ability
to perform those duties is the essence of this Agreement.

 

7.3          Notice of
Termination

 

Any termination by the
Company or by the Executive during the Employment Period shall be communicated
by the Notice of Termination to the other party given in accordance with Section 12
hereof.  The term “Notice of Termination”
shall mean a written notice that (a) indicates the specific termination
provision in this Agreement relied upon and (b) to the extent applicable,
sets forth in reasonable detail the facts and circumstances claimed to provide
a basis for termination of the Executive’s employment under the provision so
indicated.  The failure by the Executive
or the Company to set forth in the Notice of Termination any fact or
circumstance that contributes to a showing of Good Reason or Cause shall not
waive any right of the Executive or the Company hereunder or preclude the
Executive or the Company from asserting such fact or circumstance in enforcing
the Executive’s or the Company’s rights hereunder.

 

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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 the Executive’s duties during such period.

 

8.                                      Termination Payments

 

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

 

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

 

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

 

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

 

(i)            the Annual Base Salary through the
Date of Termination to the extent not theretofore paid;

 

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

 

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

 

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

 

(b)           for eighteen months after the Date of
Termination or until the Executive qualifies for comparable medical and dental
insurance benefits from another employer,

 

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whichever occurs first,
the Company shall pay the Executive’s premiums for health insurance benefit
continuation for the Executive and the Executive’s family members, if
applicable, which the Company provides to the Executive under the provisions of
the federal Consolidated Omnibus Budget Reconciliation Act of 1985, as amended
(“COBRA”),
to the extent that the Company would have paid such premiums had the Executive
remained employed by the Company (such continued payment is hereinafter
referred to as “COBRA
Continuation”);

 

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

 

(d)           an amount as severance pay equal to
two (2) times the Annual Base Salary for the fiscal year in which the Date
of Termination occurs; and

 

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

 

8.2          Termination
for Cause or Other Than for Good Reason

 

If during the Employment
Period the Executive’s employment shall be terminated by the Company for Cause
or by the Executive for other than Good Reason, this Agreement shall terminate
without further obligation on the part of the Company to the Executive, other
than the Company’s obligation to pay the Executive (a) the Annual Base
Salary through the Date of Termination, (b)  the amount of any
compensation previously deferred by the Executive in accordance with the terms
of the Company’s deferred compensation program, and (c) any accrued
vacation pay that would be payable under the Company’s standard policy, in each
case to the extent theretofore unpaid.

 

8.3          Expiration
of Term

 

In the event the
Executive’s employment is not terminated prior to expiration of the Term, this
Agreement shall terminate without further obligation on the part of the Company
to the Executive, other than the Company’s obligation to pay the Executive the
product of (a) the Annual Performance Bonus payable with respect to the
fiscal year in which the Term expired and (b) a fraction the numerator of
which is the number of days in the current fiscal year through the end of the
Term and the denominator of which is three hundred sixty-five (365).  Such payment will be made in the fiscal year
following the fiscal year in which the Term expired no later than the fifteenth
day of the third month of such subsequent fiscal year.

 

8.4          Termination
Because of Death or Total Disability

 

If during the Employment
Period the Executive’s employment is terminated by reason of the Executive’s
death or Total Disability, this Agreement shall terminate automatically without
further obligation on the part of the Company to the Executive or the Executive’s
legal representatives under this Agreement, other than the Company’s obligation
to pay the

 

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Executive the Accrued
Obligations (which shall be paid to the Executive’s estate or beneficiary, as
applicable in the case of the Executive’s death), and to provide COBRA
Continuation.

 

8.5          Payment
Schedule

 

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

 

8.6          Cause

 

For purposes of this
Agreement, “Cause”
means cause given by the Executive to the Company and shall include, without
limitation, the occurrence of one (1) or more of the following events:

 

(a)           a clear refusal to carry out any
material lawful duties of the Executive or any directions of the Board, 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 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;

 

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(c)           violation by the Executive of a state
or federal criminal law involving the commission of a crime against the Company
or any other criminal act involving moral turpitude;

 

(d)           current abuse by the Executive of
alcohol or controlled substances; deception, fraud, misrepresentation or
dishonesty by the Executive; or any incident materially compromising the
Executive’s reputation or ability to represent the Company with investors,
customers or the public; or

 

(e)           any other material violation of any
provision of this Agreement by the Executive, subject to the notice and
opportunity-to-cure requirements of Section 11 hereof.

 

8.7          Good Reason

 

For purposes of this
Agreement, “Good Reason”
means

 

(a)           the assignment to the Executive of
any duties materially inconsistent with the Executive’s position, authority,
duties or responsibilities as contemplated by Section 3.2 hereof or any
other action by the Company that results in a material diminution in such
position, authority, duties or responsibilities, excluding for this purpose an
isolated and inadvertent action not taken in bad faith and that is remedied by
the Company promptly after receipt of notice thereof given by the Executive;

 

(b)           any failure by the Company to comply
with any of the provisions of Section 5 or Section 6 hereof, other
than an isolated and inadvertent failure not taken in bad faith and that is
remedied by the Company promptly after receipt of notice thereof given by the
Executive;

 

(c)           the Company’s requiring the Executive
to be based at any office or location other than that described in Section 3.3
hereof;

 

(d)           any failure by the Company to comply
with and satisfy Section 13 hereof; provided, however, that the Company’s
successor has received at least ten (10) days’ prior written notice from
the Company or the Executive of the requirements of Section 13 hereof; or

 

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

 

provided, however, that
the Executive has notified the Company of such assignment, failure, situation
or violation within ninety (90) days of its occurrence and there has been
compliance with the notice and opportunity-to-cure requirements of Section 11
hereof.

 

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8.8          Excess
Parachute Limitation

 

If any portion of the
payments or benefits for the Executive under this Agreement, the Severance
Agreement, or any other agreement or benefit plan of the Company (including
stock option plan) would be characterized as an “excess parachute payment” to
the Executive under Section 280G of the Internal Revenue Code of 1986, as
amended (the “Code”),
the Executive shall be paid any excise tax that the Executive owes under Section 4999
of the Code as a result of such characterization, such excise tax to be paid to
the Executive at least ten (10) days prior to the date that the Executive
is obligated to make the excise tax payment. 
The determination of whether and to what extent any payments or benefits
would be “excess parachute payments” and the date by which any excise tax shall
be due, shall be determined in writing by recognized tax counsel selected by
the Company and reasonably acceptable to the Executive.  Without limitation on the foregoing, the
payments made pursuant to this Section 8.8 shall be made no later than the
end of the year following the year in which the Executive remits such excise
tax to the IRS.

 

8.9          Release

 

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

 

9.                                      Representations, Warranties
and Other Conditions

 

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

 

9.1          Health

 

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

 

9.2          No
Violation of Other Agreements

 

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

 

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10.                               Nondisclosure; Return of
Materials

 

10.1        Nondisclosure

 

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

 

10.2        Return of
Materials

 

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

 

10.3        Invention and Proprietary Information
Agreement

 

The parties have executed
concurrently with the Original Agreement the NeoRx Corporation Invention and
Proprietary Information Agreement, in the form attached to the Offer Letter as Exhibit C
(“Invention Agreement”)
and acknowledge that their respective obligations thereunder shall apply to the
entire period of Executive’s employment with the Company and shall survive the
execution of this Agreement, the termination of this Agreement and the
termination of the Executive’s employment with the Company.

 

11.                               Notice and Cure of Breach

 

Whenever a breach of this
Agreement by either party is relied upon as justification for any action taken
by the other party pursuant to any provision of this Agreement, other than
clause (a), (b), (c) or (d) of Section 8.6 hereof, before
such action is taken, the party asserting the breach of this Agreement shall
give the other party at least twenty (20) days’ prior written notice of the
existence and the nature of such breach before taking further action hereunder
and shall give the party purportedly in breach of this Agreement the
opportunity to correct such breach during the twenty (20) day period.

 

12.                               Form of Notice

 

Every notice required by
the terms of this Agreement shall be given in writing by serving the same upon
the party to whom it was addressed personally or by registered or

 

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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:

  	
   

  	
  Gerald McMahon

  
	
   

  	
   

  	
  [Address]

  
	
   

  	
   

  	
   

  
	
  If to the Company:

  	
   

  	
  Poniard
  Pharmaceuticals, Inc.

  
	
   

  	
   

  	
  300 Elliott Avenue
  West, Suite 500

  
	
   

  	
   

  	
  Seattle, Washington
  98119

  
	
   

  	
   

  	
  Attn: Corporate
  Secretary

  
	
   

  	
   

  	
   

  
	
  With a copy to:

  	
   

  	
  Perkins Coie LLP

  
	
   

  	
   

  	
  1201 Third Avenue, 48th
  Floor

  
	
   

  	
   

  	
  Seattle, Washington
  98101-3099

  
	
   

  	
   

  	
  Attn: James R.
  Lisbakken

  

 

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

 

13.                               Assignment

 

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

 

The Company shall assign
to and require any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all the business and/or
assets of the Company to assume expressly and agree to perform this Agreement
in the same manner and to the same extent that the Company would be required to
perform it if no such succession had taken place.  As used in this Agreement, “Company” shall mean
Poniard Pharmaceuticals, Inc. and any successor to its business and/or
assets as aforesaid that assumes and agrees to perform this Agreement by
operation of law, or otherwise.  All the
terms and provisions of this Agreement shall be binding upon and inure to the
benefit of and be enforceable by the parties hereto and their respective
successors and permitted assigns.

 

14.                               Waivers

 

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

 

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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.  Executive irrevocably consents to
the jurisdiction and venue of the state and federal courts located in King
County, Washington, and agrees not to bring any action, or seek to remove or
transfer any action, relating to this Agreement in or to any other court, other
than a state or federal court located in King County, Washington.

 

17.                               Arbitration; Attorneys’ Fees

 

Except in connection with
enforcing Section 10 hereof, for which legal and equitable remedies may be
sought in a court of law, any dispute arising under this Agreement shall be
subject to arbitration.  The arbitration
proceeding shall be conducted in accordance with the Commercial Arbitration Rules of
the American Arbitration Association (the “AAA Rules”) then in effect, conducted by one
arbitrator either mutually agreed upon or selected in accordance with the AAA
Rules.  The arbitration shall be
conducted in King County, Washington, under the jurisdiction of the Seattle
office of the American Arbitration Association. 
The arbitrator shall have authority only to interpret and apply the
provisions of this Agreement, and shall have no authority to add to, subtract
from or otherwise modify the terms of this Agreement.  Any demand for arbitration must be made
within sixty (60) days of the event(s) giving rise to the claim that this
Agreement has been breached.  The
arbitrator’s decision shall be final and binding, and each party agrees to be
bound to by the arbitrator’s award, subject only to an appeal therefrom in
accordance with the laws of the State of Washington.  Either party may obtain judgment upon the
arbitrator’s award in the Superior Court of King County, Washington.

 

If it becomes necessary
to pursue or defend any legal proceeding, whether in arbitration or court, in
order to resolve a dispute arising under this Agreement, the prevailing party
in any such proceeding shall be entitled to recover its reasonable costs and
attorneys’ fees.  To the extent necessary
to prevent Executive from being subject to any additional tax pursuant to Code
Section 409A(a)(1)(B), any amounts payable to the Executive pursuant to

 

13

 

this paragraph shall be
paid in no event later than the year following the year during which such costs
and fees were incurred.

 

18.                               Severability

 

If any provision of this
Agreement shall be held invalid, illegal or unenforceable in any jurisdiction,
for any reason, including, without limitation, the duration of such provision,
its geographical scope or the extent of the activities prohibited or required
by it, then, to the full extent permitted by law, (a) all other provisions
hereof shall remain in full force and effect in such jurisdiction and shall be
liberally construed in order to carry out the intent of the parties hereto as
nearly as may be possible, (b) such invalidity, illegality or
unenforceability shall not affect the validity, legality or enforceability of
any other provision hereof, and (c) any court or arbitrator having
jurisdiction thereover shall have the power to reform such provision to the
extent necessary for such provision to be enforceable under applicable law.

 

19.                               Entire Agreement

 

This Agreement supercedes
and replaces the Original Agreement, and except as described in Section 23
hereof, this Agreement constitutes the entire agreement between the Company and
the Executive with respect to the subject matter hereof, and all prior or
contemporaneous oral or written communications, understandings or agreements
between the 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 and the Offer Letter to which
it and the Original Agreement are Exhibits shall continue in full force and
effect to the extent not specifically superseded herein.

 

20.                               Withholding

 

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

 

21.                               409A Interpretation
Provision

 

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

 

14

 

22.                               Counterparts

 

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

 

23.                               Coordination with Severance
Agreement

 

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

 

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

 

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

 

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

 

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

 

	
   

  	
  PONIARD
  PHARMACEUTICALS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Caroline Loewy

  
	
   

  	
   

  	
  Name: Carloline Loewy

  
	
   

  	
   

  	
  Its: Chief Financial
  Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  EXECUTIVE

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Gerald McMahon

  
	
   

  	
   

  	
  Name:
  Gerald McMahon

  

 

15

 

APPENDIX A

 

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

 

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

 

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

 

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

 

 

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

 

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

 

2Exhibit 10.21

 

PONIARD PHARMACEUTICALS,
INC.

AMENDED AND RESTATED

KEY EXECUTIVE SEVERANCE AGREEMENT

 

This Amended and Restated
Key Executive Severance Agreement (this “Agreement”), dated
as of March 3, 2008, is entered into by and between PONIARD PHARMACEUTICALS,
INC., a Washington corporation (formerly known as NeoRx Corporation and as
supplemented by Section 10, the “Company”), and RONALD
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
above; provided, however, that this Agreement shall automatically renew for
successive additional one (1) year periods (“Renewal
Terms”), unless notice of nonrenewal is given by either party to
the other party at least nine (9) months prior to the end of the Initial
Term or any Renewal Term, and provided further that if a Change of Control (as
defined in the Change of Control Agreement referenced in Section 16
hereof) occurs during the Term, the Term shall automatically extend for the
duration of the Employment Period (as defined in the Change of Control
Agreement).  The “Term”
of this Agreement shall be the Initial Term plus all Renewal Terms and, if
applicable, the duration of the Employment Period.  At the end of the Term, this Agreement shall
terminate without further action by either the Company or the Executive.

 

2.             Employment

 

The Executive and the
Company acknowledge that, except as may otherwise be provided under any other
written agreement between the Executive and the Company, the employment of the
Executive by the Company or by any affiliated or successor company is 

 

 

“at will” and may be
terminated by either the Executive or the Company or its affiliated companies
at any time with or without cause, subject to the termination payments
prescribed herein.

 

3.             Attention and Effort

 

During any period of time
that the Executive remains in the employ of the Company, and excluding any
periods of vacation and sick leave to which the Executive is entitled, the
Executive will devote all of the Executive’s productive time, ability,
attention and effort to the business and affairs of the Company and the
discharge of the responsibilities assigned to the Executive hereunder, and will
seek to perform faithfully and efficiently such responsibilities.  It shall not be a violation of this Agreement
for the Executive to (a) serve on corporate, civic or charitable boards or
committees, (b) deliver lectures, fulfill speaking engagements or teach at
educational institutions, (c) manage personal investments, or (d) engage
in activities permitted by the policies of the Company or as specifically
permitted by the Company, so long as such activities do not significantly
interfere with the performance of the Executive’s responsibilities in
accordance with this Agreement.  It is
expressly understood and agreed that to the extent any such activities have
been conducted by the Executive prior to the Term, the continued conduct of
such activities (or the conduct of activities similar in nature and scope
thereto) during the Term shall not thereafter be deemed to interfere with the
performance of the Executive’s responsibilities to the Company.

 

4.             Termination

 

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

 

4.1          By the Company or the
Executive

 

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

 

4.2          Automatic Termination

 

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

 

2

 

beyond the Executive’s
control, unless the Executive is granted a leave of absence by the Board.

 

4.3          Notice of Termination

 

Any termination by the
Company or by the Executive during the Term shall be communicated by Notice of
Termination to the other party given in accordance with Section 9
hereof.  The term “Notice
of Termination” shall mean a written notice that (a) indicates
the specific termination provision in this Agreement relied upon and (b) to
the extent applicable, sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Executive’s
employment under the provision so indicated. 
The failure by the Executive or the Company to set forth in the Notice
of Termination any fact or circumstance that contributes to a showing of Good
Reason or Cause shall not waive any right of the Executive or the Company
hereunder or preclude the Executive or the Company from asserting such fact or
circumstance in enforcing the Executive’s or the Company’s rights hereunder.

 

4.4          Date of Termination

 

“Date
of Termination” means (a) if the Executive’s employment is
terminated by reason of death, the last day of the calendar month in which the
Executive’s death occurs, (b) if the Executive’s employment is terminated
by reason of Total Disability, immediately upon a determination by the
Company of the Executive’s Total Disability, and (c) in all other cases,
ten (10) days after the date of personal delivery or mailing of the Notice
of Termination.  The Executive’s
employment and performance of services will continue during such ten (10) day
period; provided, however, that the Company may, upon notice to the Executive
and without reducing the Executive’s compensation during such period, excuse
the Executive from any or all of the Executive’s duties during such period.

 

5.             Termination Payments

 

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

 

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

 

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

 

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

 

3

 

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

 

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

 

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

 

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

 

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

 

5.2          Termination for Cause or
Other Than for Good Reason

 

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

 

5.3          Expiration of Term

 

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

 

5.4          Termination Because of
Death or Total Disability

 

If the Executive’s
employment is terminated during the Term by reason of the Executive’s death or
Total Disability, this Agreement shall terminate automatically without further
obligation on the part of the Company to the Executive or the Executive’s legal
representatives under this Agreement, other than the Company’s obligation to
pay the Executive the Accrued Obligations (which shall be paid to the Executive’s
estate or 

 

4

 

beneficiary, as
applicable in the case of the Executive’s death) and to provide COBRA
Continuation.

 

5.5          Payment Schedule

 

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

 

5.6          Cause

 

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

 

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

 

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

 

5

 

(c)           violation by the
Executive of a state or federal criminal law involving the commission of a
crime against the Company or any other criminal act involving moral turpitude;

 

(d)           current abuse by the
Executive of alcohol or controlled substances; deception, fraud,
misrepresentation or dishonesty by the Executive; or any incident materially
compromising the Executive’s reputation or ability to represent the Company
with investors, customers or the public; or

 

(e)           any other material
violation of any provision of this Agreement by the Executive, subject to the
notice and opportunity to cure requirements of Section 8 hereof.

 

5.7          Good Reason

 

For purposes of this
Agreement, “Good Reason” means:

 

(a)           reduction of the
Executive’s annual base salary to a level below the level in effect on the date
of this Agreement, regardless of any change in the Executive’s duties or
responsibilities;

 

(b)           the assignment to the
Executive of any duties materially inconsistent with the Executive’s position,
authority, duties or responsibilities or any other action by the Company that
results in a material diminution in such position, authority, duties or
responsibilities, excluding for this purpose an isolated and inadvertent action
not taken in bad faith and that is remedied by the Company promptly after
receipt of notice thereof given by the Executive;

 

(c)           the Company’s requiring
the Executive to be based at any office or location more than fifty (50) miles
from the city in which the Executive is currently employed by the Company,
i.e., San Francisco, California or Seattle, Washington;

 

(d)           any failure by the
Company to comply with and satisfy Section 10 hereof, provided, however,
that the Company’s successor has received at least ten (10) days’ prior
written notice from the Company or the Executive of the requirements of Section 10
hereof; or

 

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

 

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

 

6

 

5.8          General Release of
Claims

 

As a condition to the
payment contemplated by this Section 5, the Executive shall execute a
general release and waiver of claims against the Company in a form satisfactory
to the Company in its sole discretion. 
By way of example and not limitation, the general release and waiver of
claims will include any claims for wages, bonuses, employment benefits, or
damages of any kind whatsoever, arising out of any contracts, express or
implied, any covenant of good faith and fair dealing, express or implied, any
theory of wrongful discharge, any legal restriction on the Company’s right to
terminate employment, or any federal, state or other governmental statute or
ordinance, including, without limitation, Title VII of the Civil Rights Act of
1964, the federal Age Discrimination in Employment Act, the Americans with
Disabilities Act, the Family and Medical Leave Act, the Washington Law Against
Discrimination, or any other legal limitation on the employment relationship.  Such release and waiver shall be delivered to
the Company no later than the fifteenth day of the third month of the fiscal
year following the year in which the Date of Termination occurs.

 

5.9          Dispute Regarding Existence
of Good Reason for Termination

 

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

 

6.             Representations, Warranties and Other
Conditions

 

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

 

6.1          Health

 

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

 

7

 

6.2          No Violation of Other
Agreements

 

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

 

7.             Nondisclosure; Return of Materials

 

7.1          Nondisclosure

 

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

 

7.2          Return of Materials

 

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

 

8.             Notice and Cure of Breach

 

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

 

9.             Form of Notice

 

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

 

8

 

	
  If to the
  Executive:

  	
   

  	
  Ronald Martell

  
	
   

  	
   

  	
  [Address]

  
	
   

  	
   

  	
   

  
	
  If to the Company:

  	
   

  	
  Poniard Pharmaceuticals, Inc.

  
	
   

  	
   

  	
  300 Elliott Avenue West, Suite 500

  
	
   

  	
   

  	
  Seattle, Washington 98119

  
	
   

  	
   

  	
  Attn: Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
  With a copy to:

  	
   

  	
  Perkins Coie LLP

  
	
   

  	
   

  	
  1201 Third Avenue, 48th Floor

  
	
   

  	
   

  	
  Seattle, Washington 98101-3099

  
	
   

  	
   

  	
  Attn: James R. Lisbakken

  

 

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

 

10.          Assignment

 

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

 

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

 

11.          Waivers

 

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

 

9

 

12.          Amendments
In Writing

 

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

 

13.          Applicable
Law

 

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

 

14.          Arbitration;
Attorneys’ Fees

 

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

 

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

 

10

 

15.          Severability

 

If any provision of this
Agreement shall be held invalid, illegal or unenforceable in any jurisdiction,
for any reason, including, without limitation, the duration of such provision,
its geographical scope or the extent of the activities prohibited or required
by it, then, to the full extent permitted by law, (a) all other provisions
hereof shall remain in full force and effect in such jurisdiction and shall be
liberally construed in order to carry out the intent of the parties hereto as
nearly as may be possible, (b) such invalidity, illegality or
unenforceability shall not affect the validity, legality or enforceability of
any other provision hereof, and (c) any court or arbitrator having
jurisdiction thereover shall have the power to reform such provision to the
extent necessary for such provision to be enforceable under applicable law.

 

16.          Coordination
With Change of Control Agreement

 

The Company and the
Executive are entering into an Amended and Restated Change of Control Agreement
(the “Change of Control Agreement”),
which agreement provides for certain forms of severance and benefit payments in
the event of termination of Executive’s employment under certain defined
circumstances.  This Agreement is in
addition to the Change of Control Agreement, providing certain assurances to
the Executive in circumstances that the Change of Control Agreement does not
cover, and in no way supersedes or nullifies the Change of Control Agreement.  Nevertheless, it is possible that a
termination of employment by the Company or by the Executive may fall within
the scope of both agreements.  In such
event, payments made to the Executive under Section 5.1 hereof shall be
coordinated with payments made to the Executive under Section 8.1 of the
Change of Control Agreement as follows:

 

(a)           Accrued Obligations
under this Agreement need not be paid if paid under the Change of Control
Agreement;

 

(b)           COBRA Continuation
under this Agreement need not be provided if provided under the Change of
Control Agreement; and

 

(c)           the severance payment required under Section 5.1(c) hereof
(and paid pursuant to Section 5.5 hereof) need not be paid to the extent a
severance payment is made under Section 8.1(d) of the Change of
Control Agreement, i.e., the credit from Section 8.1(d) of the Change
of Control Agreement is applied as amounts become due under Section 5.5
hereof.

 

17.          Excess
Parachute Payments

 

Unless provided by Section 8.8
of the Change of Control Agreement, if any portion of the payments or benefits
under this Agreement or any other agreement or benefit plan of the Company
(including stock options) would be characterized as an “excess parachute
payment” to the Executive under Section 280G of the Internal Revenue Code
of 1986, as amended (the “Code”), the Executive shall
be paid any excise tax that the Executive owes under 

 

11

 

Section 4999 of the
Code as a result of such characterization, such excise tax to be paid to the
Executive at least ten (10) days prior to the date that the Executive is
obligated to make the excise tax payment. 
The determination of whether and to what extent any payments or benefits
would be “excess parachute payments” and the date by which any excise tax shall
be due, shall be determined in writing by recognized tax counsel selected by
the Company and reasonably acceptable to the Executive.  Without limitation on the foregoing, the
payments made pursuant to this Section 17 shall be made no later than the
end of the year following the year in which the Executive remits such excise
tax to the IRS.

 

18.          Entire
Agreement

 

This Agreement supersedes
and replaces the Key Executive Severance Agreement, dated as of May 7,
2007, between the parties, and except as described in Section 16 hereof,
this Agreement constitutes the entire agreement between the Company and the
Executive with respect to the subject matter hereof, and all prior or
contemporaneous oral or written communications, understandings or agreements
between the Company and the Executive with respect to such subject matter, are
hereby superseded and nullified in their entireties, except that the
Proprietary Information and Invention Agreement between the Executive and the
Company shall continue in full force and effect to the extent not superseded by
Section 10 hereof.

 

19.          Withholding

 

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

 

20.          409A
Interpretation Provision

 

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

 

21.          Counterparts

 

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

 

12

 

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

 

	
   

  	
  PONIARD
  PHARMACEUTICALS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Caroline
  Loewy

  
	
   

  	
   

  	
  Name: Caroline
  Loewy

  
	
   

  	
   

  	
  Its: Chief
  Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  EXECUTIVE

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Ronald
  Martell

  
	
   

  	
   

  	
  Name: Ronald
  Martell

  

 

13

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