8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of The

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): March 22, 2012

SUNESIS PHARMACEUTICALS, INC.

(Exact name of registrant as specified in its charter)

Delaware	000-51531	94-3295878
(State or other jurisdiction	(Commission	(IRS Employer
of incorporation)	File Number)	Identification No.)
395 Oyster Point Boulevard, Suite 400 South San Francisco, California		94080
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (650) 266-3500

Not Applicable

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

On March 22, 2012, our Board of Directors, or the Board, approved our 2012 Bonus Program. The 2012 Bonus Program provides our executive officers and other eligible employees the opportunity to earn cash bonuses based on the level of achievement by us of certain corporate objectives, or the Corporate Objectives, and by each participant of certain individual objectives, or the Individual Objectives, from January 1, 2012 through December 31, 2012. The terms of the 2012 Bonus Program are substantially consistent with the terms of our 2011 Bonus Program.

The Board has approved the Corporate Objectives and assigned a weighting to each objective. The Compensation Committee of the Board, or the Committee, will set the Individual Objectives of our chief executive officer, as well as the Individual Objectives of the remaining executive officers based on the recommendations of the chief executive officer. The Individual Objectives of non-executive participants will be set by each participant’s immediate supervisor.

Each eligible participant in the 2012 Bonus Program may receive a cash bonus in an amount up to a specified percentage of such participant’s annual base salary earned in 2012, or the Bonus Targets. Under the 2012 Bonus Program, the Bonus Targets range from 30% to 50% of a participant’s 2012 base salary for vice president level employees and above. The Bonus Targets for each of our named executive officers is as follows:

Named Executive Officer	Bonus Target Percentage
Daniel N. Swisher, Jr. President and Chief Executive Officer	50.0%
Eric H. Bjerkholt Executive Vice President, Corporate Development and Finance, Chief Financial Officer and Corporate Secretary	40.0

The Committee will determine the degree to which the Corporate Objectives have been met after receiving the analysis and recommendations of management. Based on such determination, the Committee will adjust these Bonus Targets accordingly.

The Committee will also determine the level of achievement of the Individual Objectives by our chief executive officer based on its evaluation of the chief executive officer’s achievements and by the remaining executive officers based on the recommendations of the chief executive officer.

There is no set formula for determining the amount of bonus earned under the 2012 Bonus Program based on the achievement of the Corporate and Individual Objectives. Rather, the Committee will exercise its discretion in determining the amount of cash bonus actually earned. Payment under the 2012 Bonus Program is expected to occur in the first quarter of 2013. A participant must remain an employee through the payment date under the 2012 Bonus Program to be eligible to earn a cash bonus.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

Exhibit No.	Description
10.1	Sunesis Pharmaceuticals, Inc. 2012 Bonus Program.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	SUNESIS PHARMACEUTICALS, INC.
Dated: March 28, 2012
	By:	/s/ Eric H. Bjerkholt
		Eric H. Bjerkholt
		Executive Vice President, Corporate Development and Finance, Chief Financial Officer and Corporate Secretary

EXHIBIT INDEX

Exhibit No.	Description
10.1	Sunesis Pharmaceuticals, Inc. 2012 Bonus Program.

EX-10.1

Exhibit 10.1

SUNESIS PHARMACEUTICALS, INC.

2012 BONUS PROGRAM

Overview

The 2012 Bonus Program (the “Program”) of Sunesis Pharmaceuticals, Inc. (the “Company”) is effective as of January 1, 2012 (the “Effective Date”). The Program is designed to motivate, retain and reward Company employees through a combination of corporate and individual performance-based incentive compensation components from the Effective Date through December 31, 2012 (the “Performance Period”). Individuals employed by the Company during the Performance Period who are designated for participation by the Compensation Committee of the Company’s Board of Directors (the “Committee”) and who remain employed by the Company through the Payment Date (as defined below) (each a “Participant”) shall be eligible to earn a bonus under the Program. The Program is administered by the Committee, and any decisions made in good faith by the Committee shall be final and binding on all Participants.

The Program is designed to award a cash bonus payment (each a “Cash Bonus”) for performance during the Performance Period to Participants based in part on the level of achievement (1) by the Company of certain Company-wide objectives (the “Corporate Objectives”) and (2) by the Participant of certain individual performance objectives, which may include certain department, group and/or team objectives applicable to such Participant (the “Individual Objectives”).

Program Objectives

The Program is intended to encourage and reward the following:

• the achievement of Corporate Objectives,

• the achievement of Individual Objectives,

as well as to recognize individual contributions and effort.

Determination of Program Objectives

The Corporate Objectives shall be approved by the Board of Directors. Each Corporate Objective category shall be assigned a relative weighting from the Board of Directors, reflecting its importance to the achievement of the Company’s key results during the Performance Period; provided, however, the Board of Directors or the Committee may adjust the weighting of the Corporate Objectives in its sole discretion at any time.

The Individual Objectives shall be set as follows:

• For the Chief Executive Officer, the Individual Objectives shall be set by the Committee;

• For Participants who are executive officers (as that term is defined under Section 16 of the Securities Exchange Act of 1934, as amended, and Rule 16a-1 thereunder), other than the Chief Executive Officer (collectively, the “ Executive Participants” ), the Individual Objectives shall be set by the Committee based upon recommendations made by the Chief Executive Officer; and

• For non-Executive Participants (collectively, the “Non-Executive Participants”), the Individual Objectives shall be set by each Participant’s immediate supervisor, with input from team leaders, group and department heads and others, as appropriate.

Program Bonus Targets

Under the Program, each Participant is eligible to earn a cash bonus in an amount up to a specified percentage of his or her annual base salary that is earned in 2012, with such percentage based in part upon the position such Participant holds with the Company (the “Bonus Target”). Under the Program, the Bonus Targets range from 30% to 50% of a Participant’s 2012 base salary for Vice President level employees and above and from 6% to 20% of a Participant’s 2012 base salary for other Participants.

Determination of Cash Bonus Payments

The Company will determine the achievement of Corporate Objectives and Individual Objectives shortly after the end of the Performance Period, as follows:

Determination of Level of Achievement of Corporate Objectives

The Committee shall determine, after receiving and considering analysis and recommendations from management, the degree to which the Corporate Objectives have been met, expressed as a percentage of Corporate Objectives achieved, taking into consideration the weighting assigned to each Corporate Objective. Based on the percentage of Corporate Objectives achieved, the Committee will then determine the final aggregate bonus pool under the Program for all Participants (the “Bonus Pool”).

Adjustment of Bonus Targets based on Level of Achievement of Corporate Objectives

Bonus Target levels for Participants will be adjusted based on level of achievement of Corporate Objectives as determined by the Committee. For example, if the Committee determines that only 80% of the Program’s Corporate Objectives are achieved, each Participant’s Bonus Target will be decreased by 20% (in other words, a Participant with a 10% Bonus Target will have that Bonus Target reduced to 8%, or 80% of 10%.) Such adjusted Bonus Targets are referred to as the “Adjusted Bonus Targets.”

Determination of Bonus Payments for Individual Participants

The actual Cash Bonus earned by a Participant is based on the Participant’s (i) level of contribution to the achievement of the Corporate Objectives; (ii) level of achievement by the Participant against his or her Individual Objectives and (iii) Adjusted Bonus Target (or, if the Bonus Target was not adjusted, the original Bonus Target). There is no set formula for determining the amount of Cash Bonus earned based on the achievement of Individual Objectives or Corporate Objectives. Rather, the Committee shall exercise its discretion in determining the amount of Cash Bonus actually earned, which determination will be final and binding. In making its determination, the Committee shall consider the following:

• For the Chief Executive Officer, the Committee’s own evaluation of his achievements;

• For Executive Participants, the recommendations made by the Chief Executive Officer; and

• For Non-Executive Participants, the recommendations made by members of the Executive Committee with input from team leaders, group and department heads and supervisors, as appropriate.

In determining the actual Cash Bonus earned, the Committee may also take into account the achievement of publicly announced targets, clinical milestones, strategic goals, cross-functional teamwork and collaboration, and unforeseen changes in the economy and/or geopolitical climate.

Timing of Cash Payments Under the Program

Payment of Cash Bonuses under the Program is expected to occur in the first quarter of 2013 following the conclusion of the Performance Period on such date as determined by the Committee in its sole discretion (the “Payment Date”). A Participant must remain employed by the Company through the Payment Date in order to earn any Cash Bonus. In no event will the Payment Date occur later than the date that is the 15^th day of the third calendar month of the year following the year in which the Cash Bonus is deemed to be earned, as the Program is intended to comply with Treasury Regulation Section 1.409A-1(b)(4) and will be interpreted and administered in compliance therewith to the greatest extent possible.

Miscellaneous Provisions

Participation in the Program shall not alter in any way the at will nature of the Company’s employment of a Participant, and such employment may be terminated at any time for any reason, with or without cause and with or without prior notice. Nothing in this Program shall be construed to be a guarantee that any Participant will receive all or part of a Cash Bonus or to imply a contract between the Company and any Participant.

This Program supersedes and replaces all prior cash incentive and bonus plans of the Company, other than severance plans (both Executive and Non-Executive). The Committee may amend or terminate this Program at any time, with or without notice. The Committee may likewise terminate an individual’s participation in the Program at any time, with or without notice. Further, the Board of Directors or Committee may modify the Corporate Objectives, the Individual Objectives, the Bonus Targets and/or the weighting of the Corporate Objectives at any time.

Any Cash Bonuses paid hereunder shall be subject to recoupment in accordance with The Dodd–Frank Wall Street Reform and Consumer Protection Act and any implementing regulations thereunder, any clawback policy adopted by the Company or as is otherwise required by applicable law.

The Program shall be interpreted in accordance with California law without reference to conflicts of law principles.