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 of the Board or senior management reasonably
consistent with those duties; provided, however, that the
Exe
