Document:

Exhibit
10.12

 

EMPLOYMENT
AGREEMENT

 

December 1, 2003

 

Dr. James Young

 

Dear Jim:

 

On behalf of Sunesis Pharmaceuticals,
Incorporated (the “Company”), I am pleased to offer you the new position of
Executive Chairman of the Board of Directors. 
Speaking for myself, as well as the other members of the Company’s Board
of Directors, we look forward to working with you and to your future success as
Sunesis’ Executive Chairman.

 

The terms of your new position with the Company are as set forth below:

 

1.                                       Position.

 

a.                                       Upon your
written resignation as the Company’s CEO, you will become Executive Chairman of
the Board of Directors of the Company as of the Effective Date first written
above, working out of the Company’s offices in South San Francisco,
California.  You will as your title
suggests remain a member of the Board of Directors of the Company.

 

b.                                      You agree to the
best of your ability and experience that you will at all times loyally and
conscientiously perform all of the duties and obligations required of and from
you pursuant to the express and implicit terms hereof.  During the term of your employment, you
further agree that you will devote 60% of your business time and attention to
the business of the Company, the Company will be entitled to all of the benefits
and profits arising from or incident to all such work services and advice, you
will not render commercial or professional services of any nature to any person
or organization, whether or not for compensation without the prior consent of
the Company’s Board of Directors, and you will not directly or indirectly
engage or participate in any business that is competitive in any manner with
the business of the Company.  Nothing in
this letter agreement will prevent you from accepting speaking or presentation
engagements in exchange for honoraria or from serving on board of charitable
organizations or otherwise participating in civic, charitable or fraternal
organizations, or from owning no more than one percent (1%) of the outstanding
equity securities of a corporation whose stock is listed on a national stock
exchange.  It is contemplated that you
may serve as an advisor to certain life science venture organizations and/or on
the board of directors of other, non-competitive companies, and the Sunesis
Board of Directors will not unreasonably withhold its consent from such
activities.  During the first year
following the Effective Date, such participation shall not exceed the greater
of fifty (50) days per year (approximately one day per week) or such number

 

1

 

of days as is required for you to serve on the board of directors of
four (4) such companies.  After the first
year following the Effective Date, your participation on other boards shall be
limited only by approval of the Sunesis Board of Directors.

 

2.                                       Effective Date.                   Subject to fulfillment of any
conditions imposed by this letter agreement, you will commence this new
position with the Company on or before December 1, 2003 (the “Effective
Date”).

 

3.                                       Compensation.

 

a.                                       Base Salary.   You will
be paid a monthly salary of $16,667 which is equivalent to $200,000 on an
annualized basis.  Your salary will be
payable in two equal payments per month pursuant to the Company’s regular
payroll policy (or in the same manner as other officers of the Company).  Your base salary will be reviewed annually
for adjustment based on cost of living and merit, at the discretion of the
Board of Directors.

 

b.                                      Bonus.   In addition to
your base salary, you will be eligible to earn incentive bonuses of up to forty
percent (40%) of your base salary, based on achievement of objectives mutually
agreed upon by you and the Board of Directors.

 

4.                                       Stock Options.

 

As of the Effective Date, you have been
granted 1,400,000 Stock Options of which 843,750 have vested and 556,250 are
unvested.  All unvested Stock Options
will continue to vest according to the vesting schedule in your Stock
Option Agreements as may be modified by the Board of Directors consistent with
your previous Employment Agreement dated April 9, 2000.  You will also be eligible for additional
stock option grants from time to time at the discretion of the Board of
Directors.

 

5.                                       Benefits.

 

a.                                       Insurance Benefits.   The
Company will provide you with standard medical and dental insurance
benefits.  In addition, the Company
currently indemnifies all officers and directors to the maximum extent
permitted by law, and you will be requested to enter into the Company’s
standard form of Indemnification Agreement giving you such protection.  Pursuant to the Indemnification Agreement,
the Company will agree to advance any expenses for which indemnification is
available to the extent allowed by applicable law.

 

b.                                      Vacation.         You
will be entitled to three (3) weeks paid vacation per year.

 

6.                                       Confidentiality of Terms.   You
agree to follow the Company’s strict policy that employees must not disclose,
either directly or indirectly, any information, including any of the terms of
this agreement, regarding salary, bonuses, or stock purchase or option
allocations to any person, including other employees of the Company; provided,
however, that you may discuss such terms with members of your immediate family
and any legal, tax or accounting

 

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specialists who provide you with individual legal, tax or accounting
advice, and you may discuss it with other employees of the Company on a need to
know basis if required to carry out your duties as the Company’s Executive
Chairman.

 

7.                                       At-Will Employment.   Your
employment with the Company will be on an “at will” basis, meaning that either
you or the Company may terminate your employment at any time for any reason or
no reason on thirty (30) days notice, without further obligation or liability.

 

a.                                       In addition, if
you are terminated by the Company without “cause”, as defined below (other than
by reason of Disability), then:

 

(I)                                    your annual base
salary will continue to be paid in accordance with the Company’s standard
payroll policies during the Severance Payment Period as follows:

 

(i)  if
you are terminated within the first year from the Effective Date, then the
Severance Payment Period will be twelve (12) months and you will continue to be
paid until the earlier of (A) twelve (12) months following the date of termination
or (B) your acceptance of other full-time employment at an equal or greater
base salary.  If you obtain full time
employment at an annualized base salary less than the annualized base salary
you were entitled to at the Company, then the Company will pay you the
difference in monthly base salary on a monthly basis until the end of the
Company’s severance pay obligation.  You
shall have no obligation to obtain other employment during the severance
payment period;

 

(ii) 
if you are terminated after the first year measured from the Effective
Date but prior to the end of the second year from the Effective Date, then the
Severance Payment Period will be nine (9) months and then you will continue to
be paid until the earlier of (A) nine (9) months following the date of
termination or (B) your acceptance of other full-time employment at an equal or
greater base salary.  If you obtain full
time employment at an annualized base salary less than the annualized base salary
you were entitled to at the Company, then the Company will pay you the
difference in monthly base salary on a monthly basis until the end of the
Company’s severance pay obligation.  You
shall have no obligation to obtain other employment during the severance
payment period;

 

(iii) 
If you are terminated after the end of the second year measured from the
Effective Date, then the Severance Payment Period shall be six (6) months and
you will continue to be paid until the earlier of (A) six (6) months following
the date of termination or (B) your acceptance of other full-time employment at
an equal or greater base salary.  If you
obtain full time employment at an annualized base salary less than the
annualized base salary you were entitled to at the Company, then the Company
will pay you the difference in monthly base salary on a monthly basis until the
end of the Company’s severance pay obligation. 
You shall have no obligation to obtain other employment during the
severance payment period;

 

(II)                                you will continue to
receive benefits pursuant to the Company’s Benefit Plans, provided that such
Benefit Plans permit continuation post-termination by payment of State or
Federal COBRA premiums, at the Company’s expense until the earlier of (A) the
end of the relevant Severance Payment Period, or (B) you are no longer eligible
for State of Federal COBRA;

 

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(III)                            the number of Stock Options
vested for all Stock Options granted to you shall be measured as if the
termination occurred twelve months after the actual date of termination; and

 

(IV)                            you shall be entitled to
the benefits described in subparagraphs (I), (II) and (III) above if you
terminate employment because of Effective Termination.  “Effective Termination” shall mean:  (A) 
without your express written consent, a significant reduction of your
duties, position or responsibilities; or (B) without your express written
consent, a substantial reduction of the facilities and perquisites (which shall
not include office space and location); or (C) a material reduction by the
Company of your base salary; or (D) a reduction by the Company in the kind or
level of your benefits to which you are entitled with the result that your
overall benefits package is significantly reduced; or (E) without your express
written consent, the relocation of you to a facility or location more than one hundred
(100) miles from the Company’s current facility.

 

(V)                                Upon change of control
(as defined below) of the Company, vesting of the unvested portion of your
Stock Options or the Company’s right to repurchase stock under the stock
purchase agreement entered into upon exercise of your Stock Options shall
automatically be accelerated (or in the case of the right of repurchase, shall
lapse) so that such Stock Options (or shares, as applicable) shall become
completely vested.  For the purposes of
this Section 7(v), “Change of Control” shall mean a merger or
reorganization of the Company with or into any other corporation or
corporations, or a sale of all or substantially all of the assets of the
corporation, or a sale of securities of the Company, in which transaction the
Company’s stockholders immediately prior to such transaction own immediately
after such transaction less than 50% of the equity securities of the surviving
corporation or its parent. 
Notwithstanding the foregoing, if it is determined by the Company’s
independent public accountants that such accelerated vesting would preclude
accounting for the change of control as a pooling of interests for financial
accounting purposes, and it is a condition to the closing of the change of
control that the transaction be accounted for as a pooling of interests, then
the accelerated vesting shall not occur pursuant to this section (v) but
shall be accelerated at the earliest time which will not preclude accounting as
a pooling of interests

 

(VI)                            Your stock option
agreements and/or stock purchase agreements will reflect the vesting
acceleration and change of control provisions recited in this Agreement.

 

b.                                      Definition of “Cause.”

 

“Cause” to terminate your employment is
defined as follows:

 

(A)                              your deliberate refusal
to substantially perform the duties associated with your position;

 

(B)                                your personally
engaging in conduct that you intend to be seriously injurious to the Company,
its affiliates or employees;

 

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(C)                                your knowing violation
of a federal or state law or regulation applicable to the business of the
Company;

 

(D)                               your being convicted of
a felony under the laws of the United States or any State, or the
misappropriation of material property belonging to the Company or its
affiliates; or

 

(E)                                 your knowingly and
intentionally breaching in any material respect the terms of your Proprietary
Information Agreement.

 

c.                                       Definition of “Disability.”

 

“Disability” means a mental or physical
impairment, which in the good faith judgment of the Board of Directors of the
Company, prevents you from performing the responsibilities and duties of your
position to their satisfaction for a period of forty-five (45) consecutive days
or ninety (90) days during any twelve-month period.

 

We are all delighted to be able to extend you this offer and look
forward to working with you.  To indicate
your acceptance of the Company’s offer, please sign and date this letter in the
space provided below and return it to me, along with a signed and dated copy of
the Confidentiality Agreement.  This
letter, together with the Confidentiality Agreement, set forth the terms of
your employment with the Company and supersede any prior representations or
agreements, whether written or oral. 
This letter may not be modified or amended except by a written
agreement, signed by the Company and by you.

 

Very truly yours,

 

	
  SUNESIS PHARMACEUTICALS, INCORPORATED

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  AGREED AND ACCEPTED:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Signature

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date

  	
   

  

 

5Exhibit 10.13

PROMISSORY
NOTE

 

	
  $90,000

  	
  April 13,
  2000

  

 

For value received, the undersigned promises to pay
Sunesis Pharmaceuticals Incorporated, a Delaware corporation (the “Company”),
at its principal office the principal sum of $90,000 with interest from the
date hereof at a rate of 6.60% per annum, compounded semiannually, on the
unpaid balance of such principal sum. 
Such principal and interest shall be due and payable 180 days following
the termination of the undersigned.

 

Principal and interest are payable in lawful money of
the Unites States of America.  AMOUNTS
DUE UNDER THIS NOTE MAY BE PAID AT ANY TIME WITHOUT PREMIUM OR PENALTY.

 

Notwithstanding the foregoing, this Note may be
forgiven in whole in part as expressly set forth in Section 5(a) of that
certain Employment Agreement between the Company and the undersigned.

 

Should suit be commenced to collect any sums due under
this Note, such sum as the Court may deem reasonable shall be added hereto as
attorney’s fees.  The makers an endorsers
have severally waived presentment for payment, protest, notice of protest and
notice of nonpayment of this Note.

 

This Note, which is full recourse, is secured by a
pledge of certain shares of Common Stock of the Company and is subject to the
terms of a Pledge and Security Agreement between the undersigned and the
Company of even date herewith.

 

 

	
   

  	
       /s/
  Daryl Winter

  	
   

  
	
   

  	
  Daryl Winter

  

 

1

 

Employment
Agreement

 

 

 

 

April
5, 2000

 

 

 

Daryl Winter

3530 Crestmoor Drive

San Bruno, CA 94066

 

Dear Daryl:

On behalf of Sunesis Pharmaceuticals Incorporated (the
“Company”), I am pleased to offer you the position of Senior Vice
President & General Counsel of the Company. 
Speaking for myself, as well as the other members of the Company’s Board
of Directors, we are all very impressed with your credentials and we look
forward to your future success in this position.

The terms of your new position with the Company are as
set forth below:

1.
            Position.

a.             You will become Senior Vice President
& General Counsel of the Company, working out of the Company’s offices in
Redwood City, California.  You will
initially report to Jim Wells, and upon his/her hire, to the Company’s Chief
Executive Officer.  As General Counsel,
you will have overall responsibility for the Company’s corporate legal
functions, including but not limited to, serving as secretary of the Company’s
Board of Directors and Corporate Secretary.

b.             You agree to the best of your
ability and experience that you will at all times loyally and conscientiously
perform all of the duties and obligations required of and from you pursuant to
the express and implicit terms hereof. 
During the term of your employment, you further agree that you will
devote all of your business time and attention to the business of the Company,
the Company will be entitled to all of the benefits and profits arising from or
incident to all such work services and advice, you will not render commercial
or professional services of any nature to any person or organization, whether
or not for compensation, without the prior written consent of the Company’s
Board of Directors, and you will not directly or indirectly engage or
participate in any business that is competitive in any manner with the business
of the  Company.  Nothing in this letter agreement will prevent
you from accepting speaking or presentation engagements in exchange for
honoraria or from serving on boards of charitable organizations or otherwise
participating in civic, charitable or fraternal organizations, or from owning
no more than one percent (1%) of the outstanding equity securities of a
corporation whose stock is listed on a national stock exchange.  It is contemplated that you may serve on
boards of directors of other, non-competitive companies, and the Sunesis
Board of Directors will not unreasonably withhold its consent from such
participation.  Such participation shall
not 

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exceed
the greater of six (6) days per year or such number of days as is required for
you to serve on the board of directors of one such company.  It is also contemplated that you will spend
no more than six (6) days during the first six months of your employment, which
will not interfere with your duties contemplated by this Agreement, winding up
certain matters with and for your immediately previous employer.  Such activity will not be considered a
violation of this Agreement.

2.
            Start Date.  Subject to fulfillment of any conditions
imposed by this letter agreement, you will commence this new position with the
Company on or before April 1, 2000 (the “Start Date”).

3.
            Proof of Right to Work.  For purposes of federal immigration law, you
will be required to provide to the Company documentary evidence of your
identity and eligibility for employment in the United States.  Such documentation must be provided to us
within three (3) business days of your date of hire, or our employment
relationship with you may be terminated.

4.
            Compensation.

a.             Base Salary.  You will be paid a monthly salary of
$16,666.66 which is equivalent to $200,000 on an annualized basis.  Your salary will be payable in two equal
payments per month pursuant to the Company’s regular payroll policy (or in the
same manner as other officers of the Company). 
Your base salary will be reviewed annually for adjustment based on cost
of living and merit, at the discretion of the Board of Directors, but will not
be reduced.

b.             Bonus.  You will receive an annual guaranteed bonus
of not less than $25,000, which will be reviewed along with your base
salary.  This bonus will be paid to you
1/24 each pay period so long as you are employed by Sunesis.  You will also be eligible to earn incentive
bonuses in future years, based on achievement of objectives.

5.
            Stock Options.

a.             Initial Option Grant.  In connection with the commencement of your
employment, the Company will recommend that the Board of Directors grant you an
option to purchase 300,000 shares of the Company’s Common Stock (“Shares”) with
an exercise price equal to the fair market value on the date of the grant
(currently $0.30 per share) (the “Option”). 
The shares subject to the Option will vest over four (4) years as
follows: 75,000 Shares will vest one (1) year following your Start Date and the
remaining 225,000 Shares will vest monthly over the final three (3) years.  The Option may be exercised prior to vesting
by you entering into (i) a promissory note with the Company bearing the lowest
rate of interest to avoid imputed income to you and (ii) a standard form of
restricted stock purchase agreement with the Company.  If you do exercise the option prior to
vesting with a promissory note, the loan will be forgiven upon the earlier of
the termination of your services to the Company (so long as termination occurs
after April 1, 2001, as more fully described below) or the expiration of four
(4) years following the making of the loan. 
In the event forgiveness of the loan is triggered by the cessation of
your services to the Company, the Company will forgive 25% of the loan and
accrued interest if your employment has reached its first anniversary, plus
1/36 of the remaining principal and accrued 

2

interest
at the expiration of each month following the first anniversary of your
employment; provided, however, that repayment of the loan, to the extent
unforgiven, will be due 180 days following your cessation of performing
services for the Company.  In the event
your employment terminates due to your termination by the Company without
“cause” as defined in this Agreement or due to your resignation under paragraph
9(iv) of this Agreement, then the loan will be forgiven; and in the event your
employment terminates due to death or Disability (as defined below), one-half of
the unforgiven amount will be forgiven. 
Vesting of the Option will depend on your continued service to the
Company.  The Option will be an incentive
stock option to the maximum extent allowed by the tax code and will be subject
to the terms of the Company’s 1998 Stock Plan and the Stock Option Agreement
between you and the Company.

b.             Subsequent Option Grants.  You will be eligible to participate in any
stock option or other incentive programs available to officers or employees of
the Company.

6.
            Benefits.

a.             Insurance Benefits.  The Company will provide you with standard
medical and dental insurance benefits. 
In addition, the Company currently indemnifies all officers and
directors to the maximum extent permitted by law, and you will be requested to
enter into the Company’s standard form of Indemnification Agreement giving you
such protection.  Pursuant to the
Indemnification Agreement, the Company will agree to advance any expenses for
which indemnification is available to the extent allowed by applicable law.

b.             Vacation.  You will be entitled to three weeks paid
vacation per year, pro­rated for the remainder of this calendar year.

c.             Housing Expense.  The Company will provide you with a loan
(full recourse and secured by your stock, or other mutually acceptable
structure) in the amount of $100,000. 
The loan will be forgiven upon the earlier of the termination of the
services you provide to the Company (to the extent provided below) or the
expiration of five (5) years following the making of the loan.  In the event forgiveness of the loan is
triggered by the cessation of your provision of services to the Company, the
Company will forgive 20% of the loan and accrued interest if your employment
has reached its first anniversary, plus 1/48 of the remaining principal and
accrued interest at the expiration of each month following the first
anniversary of your employment; and repayment of the loan, to the extent
unforgiven, will be due not later than 180 days after you are no longer
performing services for the Company. 
Notwithstanding the foregoing, in the event (i) the fair market value of
the vested shares of common stock subject to the Option equal or exceed
$5,000,000 for any period of thirty (30) consecutive calendar days following a
public offering of the Company’s shares, and (ii) you may legally dispose of
the shares under applicable securities laws throughout such 30-day
period, then the entire amount of the loan (including any previously forgiven
amount) will thereupon become due on the date one hundred eighty (180) days
after the end of such 30-day period. 
You may draw the loan proceeds, subject to documentation, at any time
after the first 15 days of your employment. 
In the event your employment terminates due to your termination by the
Company without “cause” as defined in this Agreement or due to your resignation
under paragraph 9(iv) of this Agreement, then the loan will be forgiven; and in
the event your employment terminates due to death or Disability (as defined
below, one-half of the unforgiven amount will be forgiven.

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d.             Professional Requirements.  The Company will pay the costs of your State
Bar dues, your required Continuing Legal Education courses and those
professional education programs reasonably necessary for the performance of you
duties as the Company’s chief legal officer. 
Your participation in such programs will be considered work time and the
travel expenses associated with attendance at such conferences will be paid
according to the Company’s expense reimbursement policies.

e.             Reimbursement of Legal Expenses.  The Company will reimburse you the reasonable
attorney’s fees and expenses you incur in obtaining legal advice and in the
negotiating and drafting of this Agreement, in an amount not to exceed three
thousand dollars ($3,000.)

7.
            Confidential Information
and Invention Assignment Agreement.  Your acceptance of this offer and
commencement of employment with the Company is contingent upon the execution,
and delivery to an officer of the Company, of the Company’s Confidential
Information and Invention Assignment Agreement, a copy of which is enclosed for
your review and execution (the “Confidentiality Agreement”), prior to or
on your Start Date.

8.
            Confidentiality of Terms.  You agree to follow the Company’s strict
policy that employees must not disclose, either directly or indirectly, any
information, including any of the terms of this agreement, regarding salary,
bonuses, or stock purchase or option allocations to any person, including other
employees of the Company; provided, however, that you may discuss such terms
with members of your immediate family and any legal, tax or accounting
specialists who provide you with individual legal, tax or accounting advice,
and you may discuss it with other employees of the Company on a need to know
basis if required to carry out your duties as the Company’s chief legal
officer.

9.
            At-Will Employment.  Your employment with the Company will be on
an “at will” basis, meaning that either you or the Company may terminate your
employment at any time for any reason or no reason, without further obligation
or liability.  In addition, if you are
terminated by the Company without “cause,” as defined below, then:

(i)            your
annual base salary will continue to be paid in accordance with the Company’s
standard payroll policies until the earlier of (A) twelve (12) months following
the date of termination (nine (9) months following the date of termination if
termination is more than six (6) months following the Chief Executive Officer’s
start date), or (B) your acceptance of other full-time employment at an
equal or greater base salary.  If you
obtain full time employment at an annualized base salary less than the
annualized base salary you were entitled to at the Company, then the Company
will pay you the difference in monthly base salary on a monthly basis until the
end of the Company’s severance pay obligation. 
You shall have no obligation to obtain other employment during the
severance payment period;

(ii)           you
will continue to receive benefits pursuant to the Company’s Benefit Plans,
provided that such Benefit Plans permit continuation post-termination by
payment of State or Federal COBRA premiums, at the Company’s expense until the
earlier of (A) twelve (12) months following the date of termination (nine (9)
months following the date of termination if 

4

termination is more than six (6) months following the
Chief Executive Officer’s start date), or (B) you are no longer eligible for
State or Federal COBRA;

(iii)          the
number of shares exercisable under your outstanding options shall be measured
as if the termination occurred twelve (12) months after the actual date of
termination; and

(iv)          you
shall be entitled to the benefits described in subparagraphs (i), (ii) and
(iii) above if you terminate employment on or before the expiration of 12
months from your start date, or within the first six (6) months after the Chief
Executive Officer’s start date, because of Effective Termination.  Effective Termination shall mean: (A) without
your express written consent, a significant reduction of your duties, position
or responsibilities; or (B) without your express written consent, a substantial
reduction of the facilities and perquisites (including office space and
location); or (C) a material reduction by the Company of your, base salary; or
(D) a reduction by the Company in the kind or level of your benefits to which
you are entitled with the result that your overall benefits package is
significantly reduced; (E) without your express written consent, the relocation
of you to a facility or location more than one-hundred (100) miles from
the Company’s current facility or (F) if you are required by the rules of
professional responsibility of your profession to resign as the Company’s
attorney because of acts or omissions of the Company, its affiliate(s) or any
of their employees, agents or Boards of Directors.

(v)           if,
upon a change of control (as defined below) of the Company or at any time
within twelve (12) months following such change of control, you are terminated
by the Company without cause or are Effectively Terminated, then upon such
termination, vesting of the unvested portion of any stock option held by you or
the Company’s right to repurchase stock under your stock purchase agreements)
shall automatically be accelerated (or in the case of the right of repurchase,
shall lapse) so that such options or shares, as applicable, shall become
completely vested.  In addition, if you
are still providing services to the Company on the one-year anniversary
following the change of control, the unvested portion of any stock option held
by you or the Company’s right to repurchase stock under your stock purchase
agreements) shall automatically be accelerated (or in the case of the right of
repurchase, shall lapse) so that such options shall become completely
vested.  For the purposes of this Section
9(v), “Change of Control” shall mean a merger or reorganization of the Company
with or into any other corporation or corporations, or a sale of all or
substantially all of the assets of the corporation, or a sale of securities of
the Company, in which transaction the Company’s stockholders immediately prior
to such transaction own immediately after such transaction less than 50% of the
equity securities of the surviving corporation or its parent.  Notwithstanding the foregoing, if it is
determined by the Company’s independent public accountants that such
accelerated vesting would preclude accounting for the change of control as a
pooling of interests for financial accounting purposes, and it is a condition
to the closing of the change of control that the transaction be accounted for
as a pooling of interests, then the accelerated vesting shall not occur
pursuant to this section (v) but shall be accelerated at the earliest time
which will not preclude accounting as a pooling of interests.

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10.           Definition of “Cause.”

“Cause”
to terminate your employment is defined as follows:

(A)          your deliberate refusal to
substantially perform the duties associated with your position;

(B)           your personally engaging in conduct
that you intend to be seriously injurious to the Company, its affiliates or
employees;

(C)           your knowing violation of a federal
or state law or regulation applicable to the business of the Company

(D)          your being convicted of a felony under
the laws of the United States or any State, or the misappropriation of material
property belong to, the Company or its affiliates; or

(E)           your knowingly and intentionally
breaching in any material respect the terms of your Proprietary Information
Agreement.

11.
          Definition of “Disability.”

“Disability” means
a mental or physical impairment, which in the good faith judgment of the Board
of Directors of the Company, prevents you from performing the responsibilities
and duties of your position to their satisfaction for a period of forty-five
(45) consecutive days or ninety (90) days during any twelve-month period.

Your stock option agreement and/or stock purchase
agreement will reflect the vesting acceleration and change of control
provisions recited in this Agreement.

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We are all delighted to be able to extend you this
offer and look forward to working with you. 
To indicate your acceptance of the Company’s offer, please sign and date
this letter in the space provided below and return it to me, along with a
signed and dated copy of the Confidentiality Agreement.  This letter, together with the
Confidentiality Agreement, set forth the terms of your employment with the
Company and supersede any prior representations or agreements, whether written
or oral.  This letter may not be modified
or amended except by a written agreement, signed by the Company and by you.

Very truly yours,

 

 

SUNESIS PHARMACEUTICALS
INCORPORATED

 

 

By:                                                                                                          

Title:                                                                                                       

 

 

 

 

AGREED AND ACCEPTED:

DARYL WINTER

 

                                                                                                                

Signature

 

                                                                                                                

Date

 

Enclosure:             Confidential Information and
Invention Assignment Agreement

7

Date: December 19, 2001

RE: Employment Agreement for Daryl Winter
dated April 5, 2000

 

 

 

Jim Young

 

This letter provides an explanation of the intent of
the parties with respect to the above referenced Agreement regarding the matter
of forgivable loans, specifically the Housing Expense loan described under
section 6(c) of the Agreement.  The
intent of this loan was to provide a $100,000.00 for a home loan that would be
forgiven if my tenure as an employee reached the fifth anniversary from the
Hire date.  Additionally, it was
understood that if my employment was terminated during the first five years
from the Hire date then the loan would be forgiven in proportion to my tenure
or more specifically 20% would be forgiven if my employment was terminated
after the first year and an additional 1/48 per month of the remaining
principle if my employment was terminated each successive month thereafter.

To make sure the Agreement captures this
intent I propose to amend the relevant portion of the Agreement to read as
follows;

“The loan will be forgiven
upon the earlier of a) five (5) years following making of the loan or b)
termination of the services you provide the company at-the rate of 20% of
the loan amount and accrued interest if your employment has reached its first
anniversary, plus 1/48 of the remaining principal and accrued interest at the
expiration of each month following the first anniversary of your employment.  Repayment of the loan, to the extent it is
unforgiven, will be due no later than 180 days after you are no longer
performing services for the Company.”

By our signatures below we agree this was the intent
of the agreement and that this language makes it clear that the loan is not forgiven
at all until 5 years after the loan was made or that if I am terminated during
the first 5 years only the pro rata portion set forth above is forgiven.  The attached amendment (Amendment A) to the
subject Employment Agreement incorporates the above proposed language change
and certain other changes agreed to.

 

 

	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Jim
  Young (CEO)

  	
   

  	
  Daryl
  Winter

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date

  	
   

  	
  Date

  

8

Amendment
A

 

This amendment of the Employment Agreement dated April
5, 2001 between Sunesis Pharmaceuticals and Daryl Winter is hereby entered into
this 20th day of December 2001.

Regarding section 4. 
Compensation of the Agreement, it
is agreed that the Base Salary and Bonus, specifically the annual guaranteed
bonus, are to be combined so that the new Base Salary defined by the agreement
is the sum of both the Bonus and the Base Salary ($225,000.00) as of the date
of the Agreement, April 5, 2000.  All
annual increases to the Base Salary after April 5, 2000, based on cost of
living and merit and approved by the Board of Directors, is to be based on the
new combined Base Salary.

Regarding section 6(c) Housing Expense of the Agreement,
it is agreed that the second ant third sentences of that section are to be
deleted and substituted with the following sentence:

“The loan will 1e forgiven
upon the earlier of a) five (5) years following making of the loan or b) termination of the services you provide the
company at the rate of 20% of the loan amount and accrued interest if your
employment has reached its first anniversary, plus 1/48 of the remaining
principal and accrued interest at the expiration of each month following the
first anniversary of your employment. 
Repayment of the loan, to the extent it is unforgiven, will be due no
later than 180 days after you are no longer performing services for the
Company.”

9

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