Exhibit 10.22
PONIARD PHARMACEUTICALS, INC.
KEY EXECUTIVE SEVERANCE AGREEMENT
This Key Executive Severance
Agreement (VP) (this “ Agreement ”),
dated as of May 7, 2007, is entered into by and between PONIARD
PHARMACEUTICALS, INC., a Washington corporation (as supplemented by
Section 10, the “ Company ”), and
Ronald A. Martell (the “ Executive
”).
The Board of Directors of the
Company (the “ Board ”) has determined
that it is in the best interests of the Company and its
shareholders to ensure that the Company will have the continued
dedication of the Executive, notwithstanding the fact that the
Executive does not have any form of traditional employment contract
or other assurance of job security. The Board believes it is
imperative to diminish any distraction of the Executive arising
from the personal uncertainty and insecurity that arises in the
absence of any assurance of job security by providing the Executive
with reasonable compensation and benefit arrangements in the event
of termination of the Executive’s employment by the Company
under certain defined circumstances.
In order to accomplish these
objectives, the Board has caused the Company to enter into this
Agreement.
1.
Term
The initial term of this Agreement
(the “ Initial Term ”) shall be for a
period of one (1) year from the date of this Agreement as first
appearing; provided, however, that this Agreement shall
automatically renew for successive additional one (1) year periods
(“ Renewal Terms ”), unless notice of
nonrenewal is given by either party to the other party at least
nine (9) months prior to the end of the Initial Term or any Renewal
Term, and provided further that if a Change of Control (as defined
in the Change of Control Agreement referenced in Section 16
hereof) occurs during the Term, the Term shall automatically extend
for the duration of the Employment Period (as defined in the Change
of Control Agreement). The “ Term ”
of this Agreement shall be the Initial Term plus all Renewal Terms
and, if applicable, the duration of the Employment Period. At
the end of the Term, this Agreement shall terminate without further
action by either the Company or the Executive.
2.
Employment
The Executive and the Company
acknowledge that, except as may otherwise be provided under any
other written agreement between the Executive and the Company, the
employment of the Executive by the Company or by any affiliated or
successor company is “at will” and may be terminated by
either the Executive or the Company or its affiliated companies at
any time with or without cause, subject to the termination payments
prescribed herein.
3.
Attention and Effort
During any period of time that the
Executive remains in the employ of the Company, and excluding any
periods of vacation and sick leave to which the Executive is
entitled, the Executive will devote all his productive time,
ability, attention and effort to the business and affairs of the
Company and the discharge of the responsibilities assigned to him
hereunder, and will seek to perform faithfully and efficiently such
responsibilities. It shall not be a violation of this
Agreement for the Executive to (a) serve on corporate, civic
or charitable boards or committees, (b) deliver lectures,
fulfill speaking engagements or teach at educational institutions,
(c) manage personal investments, or (d) engage in
activities permitted by the policies of the Company or as
specifically permitted by the Company, so long as such activities
do not significantly interfere with the performance of the
Executive’s responsibilities in accordance with this
Agreement. It is expressly understood and agreed that to the
extent any such activities have been conducted by the Executive
prior to the Term, the continued conduct of such activities (or the
conduct of activities similar in nature and scope thereto) during
the Term shall not thereafter be deemed to interfere with the
performance of the Executive’s responsibilities to the
Company.
4.
Termination
During the Term, employment of the
Executive may be terminated as follows, but, in any case, the
nondisclosure provisions set forth in Section 7 hereof shall
survive the termination of this Agreement and the termination of
the Executive’s employment with the Company:
4.1
By the Company or the Executive
At any time during the Term, the
Company may terminate the employment of the Executive with or
without Cause (as defined below), and the Executive may terminate
his employment for Good Reason (as defined below) or for any
reason, upon giving Notice of Termination (as defined
below).
4.2
Automatic Termination
This Agreement and the
Executive’s employment shall terminate automatically upon the
death or Total Disability of the Executive. The term “
Total Disability ” as used herein shall mean
the Executive’s inability (with such accommodation as may be
required by law and which places no undue burden on the Company),
as determined by a physician selected by the Company and acceptable
to the Executive, to perform the Executive’s essential duties
for a period or periods aggregating twelve (12) weeks in any three
hundred sixty-five (365) day period as a result of physical or
mental illness, loss of legal capacity or any other cause beyond
the Executive’s control, unless the Executive is granted a
leave of absence by the Board.
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4.3
Notice of Termination
Any termination by the Company or by
the Executive during the Term shall be communicated by Notice of
Termination to the other party given in accordance with
Section 9 hereof. The term “ Notice of
Termination ” shall mean a written notice that
(a) indicates the specific termination provision in this
Agreement relied upon and (b) to the extent applicable, sets
forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of the Executive’s employment
under the provision so indicated. The failure by the
Executive or the Company to set forth in the Notice of Termination
any fact or circumstance that contributes to a showing of Good
Reason or Cause shall not waive any right of the Executive or the
Company hereunder or preclude the Executive or the Company from
asserting such fact or circumstance in enforcing the
Executive’s or the Company’s rights
hereunder.
4.4
Date of Termination
“ Date of
Termination ” means (a) if the Executive’s
employment is terminated by reason of death, the last day of the
calendar month in which the Executive’s death occurs,
(b) if the Executive’s employment is terminated by
reason of Total Disability, immediately upon a determination
by the Company of the Executive’s Total Disability, and
(c) in all other cases, ten (10) days after the date of
personal delivery or mailing of the Notice of Termination.
The Executive’s employment and performance of services will
continue during such ten (10) day period; provided, however, that
the Company may, upon notice to the Executive and without reducing
the Executive’s compensation during such period, excuse the
Executive from any or all of his duties during such
period.
5.
Termination Payments
In the event of termination of the
Executive’s employment during the Term, all compensation and
benefits shall terminate, except as specifically provided in this
Section 5.
5.1
Termination by the Company Other Than for Cause or by the Executive
for Good Reason
If during the Term the Company
terminates the Executive’s employment other than for Cause or
the Executive terminates his 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;
and
(ii)
any compensation previously deferred by the Executive (together
with accrued interest or earnings thereon, if any) and 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)
for nine (9) months after the Date of Termination or until the
Executive qualifies for comparable medical and dental insurance
benefits from another employer, whichever occurs first, the Company
shall pay the Executive’s premiums for health insurance
benefit continuation for the Executive and his family members, if
applicable, that the Company provides to the Executive under the
provisions of the federal Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended (“ COBRA
”), to the extent that the Company would have paid such
premiums had the Executive remained employed by the Company (such
continued payment is hereinafter referred to as “ COBRA
Continuation ”); and
(c)
an amount as severance pay equal to seventy five percent (75%) of
the Executive’s then current annual base salary for the
fiscal year in which the Date of Termination occurs, subject to
payment as set forth in Sections 5.5 and 5.9
hereof.
5.2
Termination for Cause or Other Than for Good Reason
If during the Term the
Executive’s employment shall be terminated by the Company for
Cause or by the Executive for other than Good Reason, this
Agreement shall terminate without further obligation on the part of
the Company to the Executive, other than the Company’s
obligation to pay the Executive the Accrued Obligations to the
extent theretofore unpaid.
5.3
Expiration of Term
In the event the Executive’s
employment is not terminated prior to expiration of the Term, this
Agreement shall terminate without further obligation on the part of
the Company to the Executive.
5.4
Termination Because of Death or Total Disability
If the Executive’s employment
is terminated during the Term by reason of the Executive’s
death or Total Disability, this Agreement shall terminate
automatically without further obligation on the part of the Company
to the Executive or his 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,
shall be made to the Executive within ten (10) working days of the
Date of Termination. Any severance payments payable to the
Executive pursuant to Section 5.1(c) shall be made to the
Executive in the form of salary continuation, payable at normal
payroll intervals during the nine (9) month period following the
Date of Termination (“ Payment Period
”).
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5.6
Cause
For purposes of this Agreement,
“ Cause ” means cause given by the
Executive to the Company and shall include, without limitation, the
occurrence of one or more of the following events:
(a)
a clear refusal to carry out any material lawful duties of the
Executive or any directions of the Board or senior management of
the Company reasonably consistent with those duties;
(b)
persistent failure to carry out any lawful duties of the Executive
or any directions
