Exhibit 10.29
Level 3 – Amended &
Restated
PONIARD PHARMACEUTICALS, INC.
AMENDED AND RESTATED
CHANGE OF CONTROL AGREEMENT
This Amended and Restated Change of
Control Agreement (this “ Agreement ”),
dated as of February 24, 2009, is entered into by and between
PONIARD PHARMACEUTICALS, INC., a Washington corporation (as
supplemented by Section 13 hereof, the “
Company ”), and JANET R. REA (the “
Executive ”) to reflect amendments made in
December, 2008.
The Board of Directors of the
Company (the “ Board ”) has determined
that it is in the best interests of the Company and its
shareholders to ensure that the Company will have the continued
dedication of the Executive, notwithstanding the possibility,
threat or occurrence of a Change of Control (as defined in
Section 1 hereof) of the Company. The Board believes it
is imperative to diminish the inevitable distraction of the
Executive arising from the personal uncertainties and risks created
by a pending or threatened Change of Control, to encourage the
Executive’s full attention and dedication to the Company
currently and in the event of any threatened or pending Change of
Control, and to provide the Executive with reasonable compensation
and benefit arrangements upon a Change of Control.
In order to accomplish these
objectives, the Board has caused the Company to enter into this
Agreement.
1.
Definitions
1.1
“ Change of
Control ” shall have the definition set forth in
Appendix A hereto, which is hereby incorporated by
reference.
1.2
“ Change of Control
Date ” shall mean the first date on which a Change of
Control occurs.
1.3
“ Employment
Period ” shall mean the two (2) year period
commencing on the Change of Control Date and ending on the second
anniversary of such date.
1.4
“ Original
Agreement ” shall mean the Change of Control
Agreement, dated as of July 7, 2008, between the
parties.
1.5
“ Severance
Agreement ” shall mean the Amended and Restated Key
Executive Severance Agreement, dated as of the date hereof, between
the parties, as it may be amended from time to time, that provides
for certain benefits related to termination of the
Executive’s employment that are unrelated to a Change of
Control.
2.
Term
The initial term of this Agreement
(“ Initial Term ”) shall be for a period
of one (1) year from the date of this Agreement as first
appearing above; provided, however, that this Agreement shall
automatically renew for successive additional one (1) year
periods (“ Renewal Terms ”)
unless notice of nonrenewal is given by either
party to the other at least ninety (90) days prior to the end of
the Initial Term or any Renewal Term; and provided, further, that
if a Change of Control occurs during the Term, the Term shall
automatically extend for the duration of the Employment
Period. The “ Term ” of this
Agreement shall be the Initial Term plus all Renewal Terms and, if
applicable, the duration of the Employment Period. At the end
of the Term, this Agreement shall terminate without further action
by either the Company or the Executive.
3.
Employment
3.1
Employment Period
During the Employment Period, the
Company hereby agrees to continue the Executive in its employ or in
the employ of its affiliated companies, and the Executive hereby
agrees to remain in the employ of the Company or its affiliated
companies, in accordance with the terms and provisions of this
Agreement; provided, however, that either the Company or the
Executive may terminate the employment relationship subject to the
terms of this Agreement.
3.2
Position and
Duties
During the Employment Period, the
Executive’s position, authority, duties and responsibilities
shall be at least commensurate in all material respects with the
most significant of those held, exercised and assigned at any time
during the ninety (90) day period immediately preceding the Change
of Control Date.
3.3
Location
During the Employment Period, the
Executive’s services shall be performed at the
Company’s offices on the Change of Control Date at which the
Executive was employed or any office that is subsequently
designated by the Company and is less than thirty (30) miles
from such location.
3.4
Employment at Will
The Executive and the Company
acknowledge that, except as may otherwise be provided under any
other written agreement between the Executive and the Company, the
employment of the Executive by the Company or its affiliated
companies is “at will” and may be terminated by either
the Executive or the Company or its affiliated companies at any
time with or without cause. Moreover, if prior to the Change
of Control Date, the Executive’s employment with the Company
or its affiliated companies terminates for any reason, then the
Executive shall have no further rights under this Agreement;
provided, however, that the Company may not avoid liability for any
termination payments that would have been required during the
Employment Period pursuant to Section 8 hereof by terminating
the Executive prior to the Employment Period where such termination
is carried out in anticipation of a Change of Control and the
principal motivating purpose is to avoid liability for such
termination payments.
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4.
Attention and
Effort
During the Employment Period, and
excluding any periods of vacation and sick leave to which the
Executive is entitled, the Executive will devote all of the
Executive’s productive time, ability, attention and effort to
the business and affairs of the Company and the discharge of the
responsibilities assigned to the Executive hereunder, and will use
the Executive’s reasonable best efforts to perform faithfully
and efficiently such responsibilities. It shall not be a
violation of this Agreement for the Executive to (a) serve on
corporate, civic or charitable boards or committees,
(b) deliver lectures, fulfill speaking engagements or teach at
educational institutions, (c) manage personal investments, or
(d) engage in activities permitted by the policies of the
Company or as specifically permitted by the Company, so long as
such activities do not significantly interfere with the performance
of the Executive’s responsibilities in accordance with this
Agreement. It is expressly understood and agreed that to the
extent any such activities have been conducted by the Executive
prior to the Employment Period, the continued conduct of such
activities (or the conduct of activities similar in nature and
scope thereto) during the Employment Period shall not thereafter be
deemed to interfere with the performance of the Executive’s
responsibilities to the Company.
5.
Compensation
As long as the Executive remains
employed by the Company during the Employment Period, the Company
agrees to pay or cause to be paid to the Executive, and the
Executive agrees to accept in exchange for the services rendered
hereunder by the Executive, the following compensation:
5.1
Salary
The Executive shall receive an
annual base salary (the “ Annual Base Salary
”), at least equal to the annual salary established by the
Board or the Compensation Committee of the Board (the “
Compensation Committee ”) or the Chief
Executive Officer for the fiscal year in which the Change of
Control Date occurs. The Annual Base Salary shall be paid in
substantially equal installments and at the same intervals as the
salaries of other executives of the Company are paid. The
Board or the Compensation Committee or the Chief Executive Officer
shall review the Annual Base Salary at least annually and shall
determine in good faith and consistent with any generally
applicable Company policy any increases for future
years.
5.2
Bonus
In addition to the Annual Base
Salary, the Executive shall be awarded, for each fiscal year ending
during the Employment Period, an annual performance bonus (the
“ Annual Performance Bonus ”) in cash at
least equal to the average annualized (for any fiscal year
consisting of less than twelve (12) full months) bonus paid or
payable to the Executive by the Company and its affiliated
companies in respect of the Executive’s performance during
the three fiscal years (or such shorter period of employment)
immediately preceding the fiscal year in which the Change of
Control Date occurs. Each Annual Performance Bonus shall be
paid in the fiscal year following the fiscal year for which the
Annual Performance Bonus is awarded, but no later than the
fifteenth day of the third month of such subsequent fiscal year,
unless the
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Executive shall elect to defer the
receipt of the Annual Performance Bonus in accordance with the
terms of the Company’s deferred compensation
program.
6.
Benefits
6.1
Incentive, Retirement and Welfare
Benefit Plans; Vacation
As long as the Executive remains
employed by the Company during the Employment Period, the Executive
shall be entitled to participate, subject to and in accordance with
applicable eligibility requirements, in such fringe benefit
programs as shall be generally made available to other executives
of the Company and its affiliated companies from time to time
during the Employment Period by action of the Board (or any person
or committee appointed by the Board to determine fringe benefit
programs and other emoluments), including, without limitation, paid
vacations; any stock purchase, savings or retirement plan,
practice, policy or program; and all welfare benefit plans,
practices, policies or programs (including, without limitation,
medical, prescription, dental, disability, salary continuance,
employee life, group life, accidental death and travel accident
insurance plans or programs).
6.2
Expenses
As long as the Executive remains
employed by the Company during the Employment Period, the Executive
shall be entitled to receive prompt reimbursement for all
reasonable employment expenses incurred by the Executive in
accordance with the policies, practices and procedures of the
Company and its affiliated companies in effect for the executives
of the Company and its affiliated companies during the Employment
Period. Without limitation on the foregoing, reimbursement
shall be made no later than the end of the fourth month of the year
following the year in which the expense was incurred.
7.
Termination
During the Employment Period,
employment of the Executive may be terminated as follows, but, in
any case, the nondisclosure provisions set forth in Section 10
hereof shall survive the termination of this Agreement and the
termination of the Executive’s employment with the
Company:
7.1
Termination by the Company or the
Executive
At any time during the Employment
Period, the Company may terminate the employment of the Executive
with or without Cause (as defined below), and the Executive may
terminate the Executive’s employment for Good Reason (as
defined below) or for any reason, upon giving a Notice of
Termination (as defined below).
7.2
Automatic
Termination
This Agreement and the
Executive’s employment during the Employment Period shall
terminate automatically upon the death or Total Disability of the
Executive. The term “ Total Disability
” as used herein shall mean the Executive’s inability
(with such accommodation as may be required by law and which places
no undue burden on the Company), as determined by a
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physician selected by the Company and acceptable
to the Executive, to perform the duties set forth in
Section 3.2 hereof for a period or periods aggregating twelve
(12) weeks in any three hundred sixty-five (365) day period as a
result of physical or mental illness, loss of legal capacity or any
other cause beyond the Executive’s control, unless the
Executive is granted a leave of absence by the Board. The
Executive and the Company hereby acknowledge that the duties
specified in Section 3.2 hereof are essential to the
Executive’s position and that the Executive’s ability
to perform those duties is the essence of this
Agreement.
7.3
Notice of
Termination
Any termination by the Company or by
the Executive during the Employment Period shall be communicated by
a Notice of Termination to the other party given in accordance with
Section 12 hereof. The term “ Notice of
Termination ” shall mean a written notice that
(a) indicates the specific termination provision in this
Agreement relied upon and (b) to the extent applicable, sets
forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of the Executive’s employment
under the provision so indicated. The failure by the
Executive or the Company to set forth in the Notice of Termination
any fact or circumstance that contributes to a showing of Good
Reason or Cause shall not waive any right of the Executive or the
Company hereunder or preclude the Executive or the Company from
asserting such fact or circumstance in enforcing the
Executive’s or the Company’s rights
hereunder.
7.4
Date of
Termination
During the Employment Period,
“ Date of Termination ” means (a) if
the Executive’s employment is terminated by reason of death,
the last day of the calendar month in which the Executive’s
death occurs, (b) if the Executive’s employment is
terminated by reason of Total Disability, immediately upon a
determination by the Company of the Executive’s Total
Disability, and (c) in all other cases, ten (10) days
after the date of personal delivery or mailing of the Notice of
Termination. The Executive’s employment and performance
of services will continue during such ten (10) day period;
provided, however, that the Company may, upon notice to the
Executive and without reducing the Executive’s compensation
during such period, excuse the Executive from any or all of the
Executive’s duties during such period. Notwithstanding
anything contained in this Agreement to the contrary, the date on
which a “separation from service” (“
Separation from Service ”) pursuant to
Section 409A of the Internal Revenue Code of 1986, as amended
(“ Code Section 409A ”), occurs
shall be the “Date of Termination” or termination of
employment for purposes of determining the timing of payments under
this Agreement to the extent necessary to have such payments and
benefits under this Agreement be exempt from the requirements of
Code Section 409A or comply with the requirements of Code
Section 409A.
8.
Termination
Payments
In the event of termination of the
Executive’s employment during the Employment Period, all
compensation and benefits set forth in this Agreement shall
terminate except as specifically provided in this
Section 8.
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8.1
Termination by the Company Other
Than for Cause or by the Executive for Good Reason
If during the Employment Period the
Company terminates the Executive’s employment other than for
Cause or the Executive terminates the Executive’s employment
for Good Reason, the Executive shall be entitled to:
(a)
receive payment of the following
accrued obligations (the “ Accrued Obligations
”):
(i)
the Annual Base Salary through the
Date of Termination to the extent not theretofore paid;
(ii)
the product of (x) the Annual
Performance Bonus payable with respect to the fiscal year in which
the Date of Termination occurs and (y) a fraction the
numerator of which is the number of days in the current fiscal year
through the Date of Termination, and the denominator of which is
three hundred sixty-five (365);
(iii)
any compensation previously deferred
by the Executive (together with accrued interest or earnings
thereon, if any); and
(iv)
any accrued vacation pay that would
be payable under the Company’s standard policy, in each case
to the extent not theretofore paid;
(b)
have the Company pay, for one
(1) year after the Date of Termination or until the Executive
qualifies for comparable medical and dental insurance benefits from
another employer, whichever occurs first, the Executive’s
premiums for health insurance benefit continuation for the
Executive and the Executive’s family members, if applicable,
that the Company provides to the Executive under the provisions of
the federal Consolidated Omnibus Budget Reconciliation Act of 1985,
as amended (“ COBRA ”), to the extent
that the Company would have paid such premiums had the Executive
remained employed by the Company (such continued payment is
hereinafter referred to as “ COBRA Continuation
”);
(c)
an amount as severance pay equal to
fifty percent (50%) of the Annual Performance Bonus payable with
respect to the fiscal year in which the Date of Termination
occurs;
(d)
an amount as severance pay equal to
fifty percent (50%) of the Annual Base Salary for the fiscal year
in which the Date of Termination occurs; and
(e)
immediate vesting of all outstanding
stock options previously granted to the Executive by the
Company.
8.2
Termination for Cause or Other
Than for Good Reason
If during the Employment Period the
Executive’s employment shall be terminated by the Company for
Cause or by the Executive for other than Good Reason, this
Agreement shall terminate without further obligation on the part of
the Company to the Executive, other than the
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Company’s obligation to pay
the Executive (a) the Annual Base Salary through the Date of
Termination, (b) the amount of any compensation previously
deferred by the Executive in accordance with the terms of the
Company’s deferred compensation program, and (c) any
accrued vacation pay that would be payable under the
Company’s standard policy, in each case to the extent
theretofore unpaid.
8.3
Expiration of Term
In the event the Executive’s
employment is not terminated prior to expiration of the Term, this
Agreement shall terminate without further obligation on the part of
the Company to the Executive, other than the Company’s
obligation to pay the Executive the product of (a) the Annual
Performance Bonus payable with respect to the fiscal year in which
the Term expired and (b) a fraction the numerator of which is
the number of days in the current fiscal year through the end of
the Term and the denominator of which is three hundred sixty-five
(365). Such payment will be made in the fiscal year following
the fiscal year in which the Term expired no later than the
fifteenth day of the third month of such subsequent fiscal
year.
8.4
Termination Because of Death or
Total Disability
If during the Employment Period the
Executive’s employment is terminated by reason of the
Executive’s death or Total Disability, this Agreement shall
terminate automatically without further obligation on the part of
the Company to the Executive or the Executive’s legal
representatives under this Agreement, other than the
Company’s obligation to pay the Executive the Accrued
Obligations (which shall be paid to the Executive’s estate or
beneficiary, as applicable in the case of the Executive’s
death) and to provide COBRA Continuation.
8.5
Payment Schedule
All payments of Accrued Obligations,
or any portion thereof payable pursuant to this Section 8,
other than deferred compensation pursuant to
Section 8.1(a)(iii) hereof, shall be made to the
Executive within ten (10) working days of the Date of
Termination. Deferred compensation pursuant to
Section 8.1(a)(iii) hereof shall be payable pursuant to
the terms of the deferred compensation program. Any severance
payments payable to the Executive pursuant to
Sections 8.1(c) and 8.1(d) hereof shall be made to
the Executive in a lump sum within ten (10) working days
of the Date of Termination. Notwithstanding the preceding
provisions of this Section 8, if any payment or benefit
pursuant to this Agreement constitutes a “deferral of
compensation” subject to Code Section 409A (after taking
into account, to the maximum extent possible, any applicable
exemptions) (a “ 409A Payment ”) treated
as payable to a Specified Employee (as defined in Section 21.1
hereof) upon Separation from Service, the provisions of
Section 21.1 hereof shall apply. Section 8.9 hereof
must be satisfied to receive payments and benefits under this
Agreement.
8.6
Cause
For purposes of this Agreement,
“ Cause ” means cause given by the
Executive to the Company and shall include, without limitation, the
occur
