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

On July 17, 2008, Vion Pharmaceuticals, Inc. (the “Company”) announced to its employees that it had adopted a bonus and retention plan (the “Plan”) covering each Company employee, including the named executive officers. Under the Plan, which was approved by the Company’s board of directors and replaces the Company’s existing non-equity incentive compensation plan, each employee is entitled to an increased bonus target for the year ending December 31, 2008 payable in three installments: (i) 20% on September 30, 2008, (ii) 30% on the first pay period after the Company’s next pre-NDA meeting with the Food and Drug Administration and (iii) 50% on January 31, 2009, subject only to his or her continuous employment with the Company through the applicable bonus payment date. The named executive officer’s bonus targets for 2008 under the Plan are set forth below:

NAMED EXECUTIVE OFFICER		BONUS TARGET
Alan Kessman		$	229,494	*
Howard B. Johnson		$	108,000
Ann Lee Cahill		$	100,000
Ivan King, Ph.D.		$	75,000

Under the Plan, each employee is now entitled to severance of a certain amount, if they are terminated without cause or following a change of control of the Company prior to December 31, 2009. While each of the named executive officers (other than the Mr. Kessman whose employment agreement already provides for severance upon either termination without cause or upon a change of control) are already party to Change of Control Severance Agreements with the Company, the Plan also provides for severance, if the named executive officers are terminated without cause prior to December 31, 2009.