Corporate Governance Code of Conduct of Officers, Directors and Employees GENERAL STATEMENT OF POLICY This Code of Conduct ("Code") has been adopted by Poniard Pharmaceuticals and its affiliates ("Poniard Pharmaceuticals") to provide ethical standards and policies by which officers, directors and employees (all of whom are referred to as "employees" unless the context requires otherwise) of Poniard Pharmaceuticals will conduct themselves in order to promote integrity and sound business practices. These standards are linked closely to our corporate culture and vision and are intended to provide guidance to persons functioning in managerial or administrative capacities, as well as to all employees. The integrity, reputation and profitability of Poniard Pharmaceuticals ultimately depend on the individual actions of our employees, representatives, officers, directors, agents and consultants. It is the policy of Poniard Pharmaceuticals and its affiliates to comply with all applicable laws and to adhere to ethical standards in the conduct of our business. Each employee is expected to read and understand this Code of Conduct, uphold these standards in daily activities and take personal responsibility for compliance with all applicable policies and procedures. Because the principles described in the Code are general in nature, you should also review Poniard Pharmaceuticals' policies and procedures for more specific guidance relating to particular topics discussed in the Code. In furtherance of Poniard Pharmaceuticals' commitment to ethical standards, management will regularly review and update our policies and procedures. Therefore, this Code is subject to modification. The Code supersedes all other such codes, policies, procedures, instructions, practices, rules or written or verbal representations to the extent that they are inconsistent with the Code. The guidelines in this Code are neither exclusive nor comprehensive. Because the business and legal environment in which Poniard Pharmaceuticals operates is complex, it would be impossible to formulate a single policy that would govern all possible situations. Employees are required to comply with the letter and the spirit of all applicable laws and policies, whether or not specifically addressed within this Code. If questions arise regarding the interpretation, application, or existence of any law, they should be directed to Poniard Pharmaceuticals' Vice President, Legal or Vice President, Human Resources. BUSINESS PRACTICES AND LEGAL COMPLIANCE Compliance with Laws and Regulations All Poniard Pharmaceuticals officers, employees and each member of the Board of Directors must comply with all laws, regulations, rules and regulatory orders applicable in the country, state and local jurisdictions where business is conducted, including securities laws, antitrust laws and other fair competition laws. Each officer, director and employee is expected to acquire appropriate knowledge of the requirements relating to his or her duties sufficient to recognize potential issues or violations and to know when to seek advice from Poniard Pharmaceuticals' Vice President, Legal or Vice President, Human Resources on specific Poniard Pharmaceuticals policies and procedures. Violations of laws, regulations, rules and orders may subject the employee to individual criminal or civil liability, as well as to disciplinary action by Poniard Pharmaceuticals. Because such individual violations may also subject Poniard Pharmaceuticals to civil or criminal liability or the loss of business, Poniard Pharmaceuticals takes legal compliance measures seriously and works diligently to enforce them. Conflicts of Interest Each officer, director and employee has a responsibility to Poniard Pharmaceuticals, its shareholders and each other to perform job duties in pursuit of Poniard Pharmaceuticals' best interests and to refrain from letting personal interests influence, or appear to influence, business activities. Employees are responsible for recognizing and avoiding any situation involving a conflict of interest. A conflict of interest exists when an individual's duty to give undivided business loyalty to Poniard Pharmaceuticals may be prejudiced by actual or potential personal benefit from another source. Poniard Pharmaceuticals employees must always strive to avoid even the appearance of a conflict of interest by avoiding any association or investment interest that interferes, might interfere, or might appear to interfere, with the independent exercise of judgment in Poniard Pharmaceuticals' best interests. Situations that may pose conflict of interest problems include, but are not limited to, the following: Investing in any entity that sells products or services similar to Poniard Pharmaceuticals', or any entity doing or seeking to do business with Poniard Pharmaceuticals. An exception to this is a relatively small investment in securities widely held by the general public; Working for, or on behalf of, any entity that competes or potentially competes with Poniard Pharmaceuticals; Placing Poniard Pharmaceuticals business with relatives or friends, or working on a Poniard Pharmaceuticals project that will have a direct impact on the financial interests of relatives or friends; Encouraging entities dealing with Poniard Pharmaceuticals to buy supplies or services from you or your relatives or friends; Borrowing money from entities doing or seeking to do business with Poniard Pharmaceuticals, an exception being a bank where the borrowing is on generally available terms; Participating in the regulatory or other activities of a community or governmental body that may have a direct impact on the business of Poniard Pharmaceuticals or its affiliates; Directly hiring or supervising a relative; Engaging in a personal relationship with another employee or vendor that affects one's ability to do one's job or disrupts the workplace; Serving as a director, partner or owner of any entity that competes with Poniard Pharmaceuticals; and Accepting gifts or gratuities valued in excess of fifty dollars from any customer, vendor, supplier, or other person doing business with Poniard Pharmaceuticals or its affiliates. Each individual is responsible for recognizing situations in which a conflict of interest or the appearance of a conflict of interest is present or might arise and for taking appropriate action to eliminate or prevent such conflict or appearance of a conflict, including reporting the situation to the appropriate level of management. Where an employee believes it is not possible to avoid any of these situations, or to avoid any other potential conflict of interest, the employee must inform his or her supervisor and make full written disclosure (in advance whenever possible) to Poniard Pharmaceuticals' Vice President, Legal or Vice President, Human Resources. Corporate Opportunities Officers, directors and employees may not exploit for their own personal gain opportunities that are discovered through the use of Poniard Pharmaceuticals property, information or position unless the opportunity is disclosed fully in writing to Poniard Pharmaceuticals' Board of Directors, and the Board of Directors explicitly declines to pursue such opportunity. The fact that a particular business opportunity is closely related to an existing line of business of Poniard Pharmaceuticals or represents a desirable avenue of expansion of Poniard Pharmaceuticals activities is a strong indication that Poniard Pharmaceuticals might be interested in the opportunity. Officers, directors and employees owe a duty to Poniard Pharmaceuticals to advance Poniard Pharmaceuticals' legitimate interests when the opportunity to do so arises. Confidential Information Poniard Pharmaceuticals' confidential information is a valuable asset, and protecting that information is one of the most important obligations you have as an officer, director or employee of Poniard Pharmaceuticals. Upon joining Poniard Pharmaceuticals, each employee signs an agreement to protect and hold confidential the proprietary information of Poniard Pharmaceuticals and its affiliates. This agreement remains in effect for as long as the employee works for Poniard Pharmaceuticals and after the employee leaves Poniard Pharmaceuticals. Under this agreement, the employee may not disclose Poniard Pharmaceuticals' confidential information to anyone or use it to benefit anyone other than Poniard Pharmaceuticals without the prior written consent of an authorized Poniard Pharmaceuticals officer. Also, the employee may not disclose confidential or proprietary information or trade secrets to other employees of Poniard Pharmaceuticals or its affiliates except on a "need to know" basis. For further details and guidance on Poniard Pharmaceuticals' confidentiality policy, please read your Invention and Proprietary Information Agreement. Intellectual Property In the performance of assigned duties, employees may develop ideas, inventions, design, processes and software, or create original works of authorship relating to the business of Poniard Pharmaceuticals ("Intellectual Property"). In consideration of the compensation paid to each employee by Poniard Pharmaceuticals, it is the understanding between Poniard Pharmaceuticals and each employee that Poniard Pharmaceuticals will have certain rights in the Intellectual Property. Where the subject matter of such Intellectual Property (i) results from or is suggested by any activity which the employee may do for or on behalf of Poniard Pharmaceuticals, (ii) is created, invented or developed on Poniard Pharmaceuticals time or using Poniard Pharmaceuticals' facilities, or (iii) is related to Poniard Pharmaceuticals' business, the employee shall assign all rights in such Intellectual Property to Poniard Pharmaceuticals. Financial Statements and Public Disclosures Poniard Pharmaceuticals must present its financial information in conformity with generally accepted accounting principles (GAAP). This financial information serves as the basis for managing Poniard Pharmaceuticals' business, measuring and fulfilling Poniard Pharmaceuticals obligations, and complying with tax and financial reporting requirements. Financial reports, accounting records, research reports, expense accounts, time sheets and other documents must represent the relevant facts or the nature of the relevant transactions. Accounting and financial reporting practices must be fair and proper, in accordance with GAAP where necessary, and use management's best judgment where necessary. Poniard Pharmaceuticals endeavors to provide full, fair, accurate, timely and understandable disclosures in reports and documents that Poniard Pharmaceuticals files with, or submits to, the Securities and Exchange Commission (the "SEC") and in other public communications made by Poniard Pharmaceuticals. Clear, open and frequent communication among all management levels and personnel on all significant financial and operating matters substantially reduces the risk of problems in the accounting and financial reporting areas and helps achieve these goals. All management-level employees are expected to be aware of these risks and to communicate accordingly. Internal controls will be adopted from time to time by management as needed to further assist in preventing and detecting errors and fraud, promoting accuracy and completeness in financial records and providing full, fair, accurate, timely and understandable disclosure in periodic reports and other public communications. Securities Laws and Insider Trading It is against Poniard Pharmaceuticals policy for any Poniard Pharmaceuticals individual to profit from material undisclosed information relating to Poniard Pharmaceuticals or any entity with which Poniard Pharmaceuticals does business. If an officer, director or employee is in possession of material inside information that Poniard Pharmaceuticals has not yet disclosed to the public, he or she may not purchase or sell any of the securities of Poniard Pharmaceuticals or advise ("tip") others to trade or not trade in Poniard Pharmaceuticals securities. Material inside information is defined as facts that have not been disclosed to the public that would influence a reasonable investor's decision to buy or sell Poniard Pharmaceuticals' stock or other securities. Also, if an officer, director or employee has inside or unpublished knowledge about any of Poniard Pharmaceuticals' public company suppliers, customers or any other public company that Poniard Pharmaceuticals does business with, he or she may not purchase or sell securities of those companies or tip others to do so. Insider trading is a crime, subject to fines of up to $5,000,000 and 20 years in jail for individuals. In addition, the SEC may seek the imposition of a civil penalty of up to three times the profits made or losses avoided from the trading. Insider traders must also disgorge any profits made and are often subjected to an injunction against future violations. Insider traders may further be subjected to civil liability in private law suits. Moreover, U.S. securities laws provide for penalties not only for those who engage in insider trading, but also for those controlling persons who fail to take appropriate action when they either knew or should have known that persons within their control were violating these rules. Controlling persons, including supervisory personnel, may face penalties of the greater of $5,000,000 or three times the profits made or losses avoided by the trader if they recklessly fail to take preventive steps to control insider trading. Therefore, it is essential that Poniard Pharmaceuticals individuals be alert to those situations when others within Poniard Pharmaceuticals (particularly those over whom the employee has some supervisory authority) may not be observing the rules of insider trading. We urge you to contact Poniard Pharmaceuticals' Insider Trading Policy Compliance Officer or Vice President, Legal if you are unsure as to whether or not you are free to trade under a particular set of circumstances. For further details and guidance, please read Poniard Pharmaceuticals' Insider Trading Policy. Antitrust Laws Poniard Pharmaceuticals is committed to obeying both the letter and the spirit of the many laws designed to encourage and protect free and fair competition. The United States antitrust laws prohibit agreements or actions in "restraint of trade," defined as restrictive practices that may reduce or hinder competition. These laws require that Poniard Pharmaceuticals business decisions must be made and activities undertaken without any agreement or coordination with competitors or potential competitors. Among those agreements and activities constituting clear violations are agreements and understandings to fix or control prices and other terms of sale, to allocate products, territories or markets, or to limit the production or sale of products. Accordingly, employees must take great care to avoid any communications with Poniard Pharmaceuticals' competitors with respect to these types of matters. Violations of the antitrust laws are criminal offenses and may result in substantial fines and imprisonment. The antitrust laws also regulate conduct with suppliers. For example, resale price agreements are prohibited, and the Robinson-Patman Act prohibits price discrimination in the sale of goods by suppliers and knowingly inducing or receiving discriminatory pricing by buyers. Individuals involved in pricing discussions with suppliers must be knowledgeable with respect to the price discrimination rules and must consult with Poniard Pharmaceuticals' Vice President, Legal as issues arise. No employee, agent or contractor of Poniard Pharmaceuticals may enter into an agreement or understanding, written or oral, express or implied, with any competitor concerning prices, discounts, other terms or conditions of sale, profits or profit margins, costs, allocation of product or geographic markets, allocation of customers, limitations of production, boycotts of customers or suppliers, bids or the intent to bid or even discuss or exchange information on these subjects. In some cases, legitimate joint ventures with competitors may permit exceptions to these rules, as may bona fide purchases from or sales to competitors of non-competitive products, but Poniard Pharmaceuticals' Vice President, Legal must review all such proposed ventures or arrangements in advance. Collusion among competitors is illegal, and the consequences of a violation are severe and may include termination and possible criminal prosecution. Although the spirit of antitrust laws is straightforward, their application to particular situations can be quite complex. To ensure that Poniard Pharmaceuticals complies with these laws, each officer, director and employee of Poniard Pharmaceuticals should consult with Poniard Pharmaceuticals' Vice President, Legal early on when questionable situations arise. Political Activity Poniard Pharmaceuticals reserves the right to communicate its position on important issues to elected representatives and other government officials. It is Poniard Pharmaceuticals' policy to comply with all local, state, federal, foreign and other applicable laws, rules and regulations regarding political contributions. Poniard Pharmaceuticals' funds or assets must not be used for, or be contributed to, political campaigns or political practices under any circumstances without the prior written approval of Poniard Pharmaceuticals' Chief Financial Officer (or, if there is no Chief Financial Officer, its Principal Accounting Officer) or Vice President, Legal and, if required, the Board of Directors. If employees, officers or directors engage in personal political activity on their own time, they must take particular care not to imply that they are acting on behalf of Poniard Pharmaceuticals. Maintaining and Managing Records Poniard Pharmaceuticals maintains a record retention policy. The purpose of this policy is to set forth Poniard Pharmaceuticals' business and legal requirements in managing records, including all recorded information regardless of medium or characteristics. Records may include paper documents, electronic documents, emails, compact disks, computer hard disks, floppy disks, microfiche, microfilm and audio recordings. Poniard Pharmaceuticals is required by local, state, federal, foreign and other applicable laws, rules and regulations to retain certain records and to follow specific guidelines in managing its records. Civil and criminal penalties for failure to comply with such guidelines can be severe for employees, agents, contractors and Poniard Pharmaceuticals, and failure to comply with such guidelines may subject the employee, agent or contractor to disciplinary action, up to and including termination of employment or business relationship at Poniard Pharmaceuticals' sole discretion. Poniard Pharmaceuticals must make and retain books, records and accounts that, in reasonable detail, fairly reflect Poniard Pharmaceuticals' transactions and the disposition of its assets, conforming to applicable legal requirements and, where necessary, GAAP. No entry may be made on Poniard Pharmaceuticals' books and records that misrepresents, hides or disguises any transaction. Poniard Pharmaceuticals books and records should be retained for the period of time specified in applicable record retention guidelines. After that time, they may be disposed of unless required to be retained in connection with pending litigation or a pending investigation. Employees should consult with Poniard Pharmaceuticals' Vice President, Legal for assistance in reviewing applicable retention guidelines or the propriety of disposing of a Poniard Pharmaceuticals record. Discrimination and Sexual Harassment Poniard Pharmaceuticals believes the fair and equitable treatment of employees is an important component of its culture and values. It is the policy of Poniard Pharmaceuticals to treat each employee, supplier and customer without regard to the sex, race, ethnicity, sexual orientation, physical or mental disability, age, religion, veteran status or national origin of such person, or any other classification prohibited by law. Poniard Pharmaceuticals' policy is to recruit, hire, train, promote, assign, transfer, lay off and terminate employees based on their own abilities, achievements, experience and conduct without regard to any illegal or unethical classifications. No form of harassment or unlawful discrimination against anyone on the basis of sex, race, ethnicity, sexual orientation, physical or mental disability, age, pregnancy, religion, veteran status, national origin or any other legally protected status will be tolerated. This includes any demeaning, insulting, embarrassing or intimidating behavior directed at an individual on the basis of any of the foregoing. If you believe that you or another person may have been subjected to harassment or discrimination or if you believe that the conduct of any person at the workplace violates any aspect of this policy, you must report such conduct or statements to Poniard Pharmaceuticals' Vice President, Legal or Vice President, Human Resources. Each allegation of harassment or discrimination will be promptly investigated in accordance with Poniard Pharmaceuticals policy. No Contractual Rights All statements contained in this Code are intended to reflect general policies, principles and procedures, do not represent contractual commitments on the part of Poniard Pharmaceuticals, and may be changed at any time. Without limiting the generality of the foregoing, nothing in this Code provides any additional employment rights, employment contracts or terms of employment to any person or modifies in any way the "employment at will" doctrine as it applies to Poniard Pharmaceuticals and its employees. DISSEMINATION AND ENFORCEMENT OF THE CODE Dissemination and Compliance Certification Current versions of the Code will be distributed annually or periodically to all officers, directors and employees of Poniard Pharmaceuticals and its subsidiaries. Upon receipt, officers, directors and employees must sign the acknowledgement form at the end of the Code and return it to Poniard Pharmaceuticals' Vice President, Human Resources indicating that you have read, understand, and agree to comply with the Code. Routine Monitoring Compliance with the Code is, first and foremost, the individual responsibility of every employee, officer and director. Poniard Pharmaceuticals seeks to foster an environment in which ethical issues and concerns may be raised and discussed with supervisors or others without fear of retribution. Managers and supervisors have key roles in assuring employee compliance with the Code and remaining accessible and open to discuss employee ethical concerns. All management-level employees are expected to demonstrate their personal commitment to Poniard Pharmaceuticals' standards of conduct and to manage their employees accordingly. Poniard Pharmaceuticals' management has established an orientation program for new employees to promote understanding of the Code and encourage adherence to it. Managers and supervisors are responsible for ensuring that all employees under their supervision participate in appropriate compliance training programs. Poniard Pharmaceuticals will require an annual Code of Conduct Certification from all employees, officers, directors, and others who may be designated because of the nature of their work, stating that they have complied with the Code, brought it to the attention of everyone under their supervision whose acts or failures to act could contribute to a violation of policy, and know of no violations that have not been disclosed. Reporting of Illegal and Unethical Behavior You have the right and the responsibility to question or challenge situations in which you suspect that something improper, unethical or illegal is occurring. You are expected to report what you believe in good faith to be a violation of law or Poniard Pharmaceuticals policy, whether accidental or deliberate, to your immediate supervisor. If you are not satisfied with your supervisor's response or if you require an alternative means of reporting a violation, you may report the matter directly to Poniard Pharmaceuticals' Vice President, Legal or Vice President, Human Resources. We encourage you to err on the side of reporting rather than letting a possible violation go uncorrected. A knowing failure to report a violation may itself be a violation of the Code. Upon learning of a credible suspected violation of law or Poniard Pharmaceuticals policy, supervisors must communicate the employee's report to more senior management and, where appropriate, to Poniard Pharmaceuticals' Vice President, Legal, so that the substance of the report may be investigated. You may confront an ethical issue that neither this Code nor other Poniard Pharmaceuticals policies expressly address. Employees should feel comfortable contacting a member of management, a supervisor or Poniard Pharmaceuticals' Vice President, Legal or Vice President, Human Resources for guidance in such situations. Any employee who in good faith raises an issue regarding a possible violation of law or Poniard Pharmaceuticals policy will not be subject to retaliation, and their confidentiality will be protected to the extent possible, consistent with law, corporate policy and the requirements necessary to conduct an effective investigation. Allegations will be investigated promptly by Poniard Pharmaceuticals' Vice President, Legal and, if appropriate, reported to authorities. To facilitate implementation of this Code, officers, directors and employees have a duty to cooperate with the investigation process and to maintain the confidentiality of investigative information unless specifically authorized to disclose such information. Please consult Poniard Pharmaceuticals' Whistleblowing / Complaint Procedures for Accounting and Auditing Matters and Poniard Pharmaceuticals' Code of Ethics for Senior Financial Officers. Waivers Any waiver of any provision of this Code for a director or an officer of Poniard Pharmaceuticals must be approved in writing by the Board of Directors and shall be publicly disclosed on a timely basis, to the extent required by applicable rules and regulations of the Securities and Exchange Commission and The Nasdaq Stock Market, Inc. Any waiver of any provision of this Code with respect to any other employee, agent or contractor must be approved in writing by Poniard Pharmaceuticals' Chief Executive Officer or Vice President, Legal. Penalties for Violations of the Code The matters covered in this Code are important to Poniard Pharmaceuticals, its shareholders and its business partners. We expect all of our officers, directors and employees to adhere to these policies in carrying out their duties for Poniard Pharmaceuticals. Appropriate action will be taken against anyone whose actions are found to violate these policies. No improper or illegal behavior will be justified by a claim that it was ordered by someone of higher authority. No one, regardless of position, is authorized to direct an employee to commit a wrongful act. Any director, officer, manager or supervisor who directs, approves or condones infractions, or has knowledge of them and does not act promptly to report and correct them in accordance with this Code, will also be subject to disciplinary action. It is each person's responsibility to resolve with Poniard Pharmaceuticals' Vice President, Legal any potential conflicts with this Code. Upon receiving reports of alleged violations of the Code, Poniard Pharmaceuticals will weigh relevant facts and circumstances, including but not limited to the extent to which the behavior was contrary to the express language or general intent of this Code or other Poniard Pharmaceuticals policies, the nature and severity of the violation, whether the violation was a single occurrence or involved repeated occurrences, whether the violation appears to have been intentional or inadvertent, whether the person in question had been advised prior to the violation as to the proper course of action, the alleged violator's history with Poniard Pharmaceuticals and other factors which Poniard Pharmaceuticals deems relevant. Disciplinary actions may range from censure to revocation of privileges to re-assignment, demotion, suspension or termination of employment or business relationship at Poniard Pharmaceuticals' sole discretion. Where Poniard Pharmaceuticals has suffered a loss, it may pursue legal remedies against the persons or entities responsible. Where laws have been violated, Poniard Pharmaceuticals will cooperate with the appropriate authorities. In some cases, Poniard Pharmaceuticals may have a legal or ethical obligation to call violations to the attention of external enforcement authorities. ACKNOWLEDGEMENT OF RECEIPT OF CODE OF CONDUCT BY PONIARD PHARMACEUTICALS' OFFICERS, DIRECTORS AND EMPLOYEES I have received and read my personal copy of Poniard Pharmaceuticals' Code of Conduct ("Code"). I am familiar with the standards and policies contained in the Code and understand that there may be additional policies or laws specific to my position. I agree to comply with the applicable Code requirements, adhere to Code principles and standards, and promptly report to Poniard Pharmaceuticals' Vice President, Legal, Vice President, Human Resources or those otherwise designated in the Code any information concerning Code violations. If I have questions concerning the meaning or application of Code provisions, any Poniard Pharmaceuticals policies, or the legal and regulatory requirements applicable to my position, I understand that I can consult my supervisor, manager or Poniard Pharmaceuticals' Vice President, Legal or Vice President, Human Resources with the expectation that my questions or reports to these sources will be maintained in confidence to the extent practicable. _____________________________ Name _____________________________ Signature _____________________________ Date