Exhibit 10.24
Level 2 – Amended &
Restated
PONIARD PHARMACEUTICALS, INC.
AMENDED AND RESTATED
KEY EXECUTIVE SEVERANCE AGREEMENT
This Amended and Restated Key
Executive Severance 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 10 hereof, the “
Company ”), and CHENI KWOK (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 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 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 any 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, 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
Termination 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 a Notice of Termination (as defined
below).
4.2
Automatic
Termination
This Agreement and the
Executive’s employment during the Term shall terminate
automatically upon the death or Total Disability of the
Executive. The term “ Total Disability
” as used herein shall mean the Executive’s inability
(with such accommodation as may be required by law and which places
no undue burden on the Company), as determined by a physician
selected by the Company and acceptable to the Executive, to perform
the Executive’s essential duties for a period or periods
aggregating twelve (12) weeks in any three hundred sixty-five (365)
day period as a result of physical or mental illness, loss of legal
capacity or any other cause beyond the Executive’s control,
unless the Executive is granted a leave of absence by the
Board.
4.3
Notice of
Termination
Any termination by the Company or by
the Executive during the Term shall be communicated by a 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
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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. 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.
5.
Termination
Payments
In the event of termination of the
Executive’s employment during the Term, all compensation and
benefits shall terminate, except as specifically provided in this
Section 5.
5.1
Termination by the Company Other
Than for Cause or by the Executive for Good Reason
If during the Term the Company
terminates the Executive’s employment other than for Cause or
the Executive terminates the Executive’s employment for Good
Reason, the Executive shall be entitled to:
(a)
receive payment of the following
accrued obligations (the “ Accrued Obligations
”):
(i)
the Executive’s then current
annual base salary through the Date of Termination to the extent
not theretofore paid;
(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;
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(b)
have the Company pay 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
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 during the Term 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.
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) hereof, 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) hereof 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) hereof 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. Notwithstanding the preceding provisions of
this Section 5, 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 20.1 hereof)
upon
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Separation from Service, the provisions of
Section 20.1 hereof shall apply. Section 5.8 hereof
must be satisfied to receive payments and benefits under this
Agreement.
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 (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 or senior management of the Company reasonably consistent
with those duties;
(b)
persistent failure to carry out any
lawful duties of the Executive or any directions of the Board or
senior management reasonably consistent with those duties;
provided, however, that the Executive has been given reasonable
notice and opportunity to correct any such failure;
(c)
violation by the Executive of a
state or federal criminal law involving the commission of a crime
against the Company or any other criminal act involving moral
turpitude;
(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)
material 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;
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(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 E
