Exhibit 10.1
PONIARD PHARMACEUTICALS,
INC.
CHANGE OF CONTROL AGREEMENT
This Change of
Control Agreement (this “
Agreement
” ), dated as of February 1, 2008, is entered
into by and between PONIARD PHARMACEUTICALS, INC., a Washington
corporation (as supplemented by Section 13, the “Company” ), and Robert L.
De Jager (the “ Executive
”).
The Board of
Directors of the Company (the “ Board
”) has determined that it is in the best interests of the
Company and its shareholders to ensure that the Company will have
the continued dedication of the Executive, notwithstanding the
possibility, threat or occurrence of a Change of Control (as
defined in Section 1 hereof) of the Company. The Board
believes it is imperative to diminish the inevitable distraction of
the Executive arising from the personal uncertainties and risks
created by a pending or threatened Change of Control, to encourage
the Executive’s full attention and dedication to the Company
currently and in the event of any threatened or pending Change of
Control, and to provide the Executive with reasonable compensation
and benefit arrangements upon a Change of Control.
In order to
accomplish these objectives, the Board has caused the Company to
enter into this Agreement.
1.
Definitions
1.1
“ Change of
Control ” shall have the definition set forth
in Appendix A hereto, which is hereby incorporated by
reference.
1.2
“ Change of Control
Date ” shall mean the first date on which a
Change of Control occurs.
1.3
“ Employment
Period ” shall mean the two (2) year
period commencing on the Change of Control Date and ending on the
second anniversary of such date.
1.4
“ Severance
Agreement ” shall mean the Key Executive
Severance Agreement, dated as of the date hereof, between the
parties, as it may be amended from time to time, that provides for
certain benefits related to termination of the Executive’s
employment that are unrelated to a Change of Control.
2.
Term
The initial term
of this Agreement (“ Initial
Term
”) shall be for a period of one (1) year from the date
of this Agreement as first appearing above; provided, however, that
this Agreement shall automatically renew for successive additional
one (1) year periods (“ Renewal Terms ”) unless notice of
nonrenewal is given by either party to the other at least ninety
(90) days prior to the end of the Initial Term or any Renewal Term,
and provided
further that if a
Change in Control occurs during the Term, the Term shall
automatically extend for the duration of the Employment
Period. The “ Term ” of this Agreement shall be
the Initial Term plus all Renewal Terms and, if applicable, the
duration of the Employment Period. At the end of the Term,
this Agreement shall terminate without further action by either the
Company or the Executive.
3.
Employment
3.1
Employment Period
During the
Employment Period, the Company hereby agrees to continue the
Executive in its employ or in the employ of its affiliated
companies, and the Executive hereby agrees to remain in the employ
of the Company or its affiliated companies, in accordance with the
terms and provisions of this Agreement; provided, however, that
either the Company or the Executive may terminate the employment
relationship subject to the terms of this Agreement.
3.2
Position and Duties
During the
Employment Period, the Executive’s position, authority,
duties and responsibilities shall be at least commensurate in all
material respects with the most significant of those held,
exercised and assigned at any time during the ninety (90) day
period immediately preceding the Change of Control Date.
3.3
Location
During the
Employment Period, the Executive’s services shall be
performed at the Company’s offices on the Change of Control
Date at which the Executive was employed or any office that is
subsequently designated by the Company and is less than thirty
(30) miles from such location.
3.4
Employment at Will
The Executive and
the Company acknowledge that, except as may otherwise be provided
under any other written agreement between the Executive and the
Company, the employment of the Executive by the Company or its
affiliated companies is “at will” and may be terminated
by either the Executive or the Company or its affiliated companies
at any time with or without cause. Moreover, if prior to the
Change of Control Date, the Executive’s employment with the
Company or its affiliated companies terminates for any reason, then
the Executive shall have no further rights under this Agreement;
provided, however, that the Company may not avoid liability for any
termination payments that would have been required during the
Employment Period pursuant to Section 8 hereof by terminating
the Executive prior to the Employment Period where such termination
is carried out in anticipation of a Change of Control and the
principal motivating purpose is to avoid liability for such
termination payments.
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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 bonus (the
“ Annual
Bonus ”) in cash at least equal to the average
annualized (for any fiscal year consisting of less than twelve (12)
full months) bonus paid or payable (including, with respect to any
stock or stock options awarded as an annual bonus in place of cash,
the value of the stock awards and the compensation expense
disclosed in the Company’s financial statements for the grant
of the
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stock options) to the
Executive by the Company and its affiliated companies in respect of
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 Bonus shall be paid in the
fiscal year following the fiscal year for which the Annual 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 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
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
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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.
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.
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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 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 one year after the Date of Termination or until the Executive
qualifies for comparable medical and dental insurance benefits from
another employer, whichever occurs first, the Company shall pay the
Executive’s premiums for health insurance benefit
continuation for the Executive and 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
Bonus payable with respect to the fiscal year in which the Date of
Termination occurs;
(d)
an amount as severance pay equal to one (1) times the Annual
Base Salary for the fiscal year in which the Date of Termination
occurs; and
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(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 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 Exe
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