Exhibit 10.4







Exhibit 10.4




	 	 	 
	

	 	1820 East Ray Road • Chandler, AZ 85225

Phone: 480.656.8325

www.championsbiotechnology.com







January 5, 2009




Mark Schonau

1748 East Queen Palm Drive

Gilbert, Arizona 85234




Dear Mark,




On behalf of Champions Biotechnology, Inc., we are pleased to offer you the position of Chief
Financial Officer. You will be reporting to Doug Burkett, President of Champions Biotechnology,
Inc. (CBI) currently located in Chandler, Arizona. This letter outlines the terms of your proposed
employment offer as a full-time employee:




	 	•	 	Commencement of Employment: Your employment start date will be January 19,
2009. Your employment with the Company at all times will be at-will, meaning either
you or the Company can terminate the employment relationship, with or without cause,
and with or without notice, at any time.







	 	•	 	Compensation: Your gross salary per pay period (24 periods per year) will
be $7,708.33, which is $185,000 annually. Your salary is based on a minimum 40-hour
standard workweek whether working in the Chandler, Arizona office, or traveling for
the company.







	 	•	 	Champions Biotechnology Stock Option Grant: Upon commencement of
employment, and subject to approval by the Company’s Board of Directors, you will be
granted an option to purchase 233,000 shares of the Company’s common stock under the
terms of the Company’s 2008 Equity Incentive Plan and the terms set forth in the
option grant agreement, which will be provided to you after you commence employment.
The share price for the stock options will be based on the fair market value of
Champions Biotechnology stock on the date of approval by the Board of Directors. Your
stock will vest over a three year period. Upon completion of one full year of
service, 1/3rd of your options will be fully vested. Upon completion of
two full years of service, 2/3rd of your options will be fully vested.
Upon completion of three full years of service, 100% of your stock options will be
fully vested. Options shall not vest on any pro rata basis for any partial years of
employment.







	 	•	 	Executive Benefit Programs. As an Executive, you shall be permitted to
participate in all employee benefit programs implemented by the Company for the
benefit of any of its full-time employees, including, without limitation, disability
insurance, group and other life insurance, sickness, and accident and health insurance
programs, as listed below, provided that you qualify or are otherwise eligible to
participate under the terms of such programs. Except as may be limited by applicable
law, the Company reserves the right to modify, suspend, or discontinue any benefit
plans, policies, and practices at any time without notice to or recourse by Executive,
so long as such action is taken generally with respect to other similarly situated
persons.











 


 









 








Confidential





	 	•	 	Bonus: Each year the Compensation Committee evaluates the Company’s
performance objectives and market competitive executive compensation data to
determine and approve the goals and targets of the Executive Incentive Plan.
In fiscal year 2009, you are eligible to participate in the Company’s
Executive Incentive Plan at up to 20% of your annual base salary, paid in
cash, stock or stock options, or any combination thereof, at the Company’s
sole discretion, as well as eligible to receive a Restricted Stock Unit (RSU)
grant of 35,000 shares; as determined by your achievement of specific personal
and Company objectives, as determined by the Company in its sole discretion.
Bonus payment will be prorated based upon your start date in relation to the
Company fiscal year-end. Complete details of the Plan will be provided to you
following your hire.







	 	•	 	401(k) Alternative Match Opportunity: The Company at this time does not
offer a 401(k) to its employees and as such an employer match toward a 401(k)
is not currently available. If the Company adds 401(k) employee benefits at a
later date then your 401(k) benefits will be commensurate with benefits
provided to other Company employees.







	 	•	 	Health Insurance: You will be eligible to join Champions Biotechnology
Group Medical & Dental Plan on the first day of the month following your date
of hire. Participation in that plan shall be governed by the terms and
condition set forth in the plan documents.







	 	•	 	PTO: You will be eligible to begin accruing Paid Time Off the first day of
the month following 90 calendar days of employment. During the first year of
service you are eligible to accrue and use up to 18 days of PTO. PTO accrual,
carryover, and payment of PTO upon termination of employment shall be subject
to and in accordance with the Company’s PTO policies and practices.







	 	•	 	Holidays: You will be eligible to take advantage of paid Holidays offered
by the Company. The Company offers 11 paid Holidays to full-time employees.







	 	•	 	Other Reimbursement: Employees who drive their own cars on business trips
are reimbursed the prevailing company/IRS mileage reimbursement rate plus parking and
tolls.











 


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Confidential





	 	•	 	Severance: In the event of an involuntary termination of your employment
by the Company due to a reduction in force/downsizing, a change in Company direction,
a relocation by the Company of Executive’s principal work site to a facility located a
significant distance outside the greater Phoenix, Arizona metropolitan area, or job
elimination, the Company will provide a severance payment equivalent to six pay
periods, $46,250, based on annual base salary of $185,000, provided that you deliver
to the Company a full release acceptable to the Company. If termination is with
“cause” (as defined in the following sentence) no severance is payable. For purposes
of this letter, the term “cause” shall mean (i) the inability, failure or refusal of
the Executive to perform the duties or render the services reasonably assigned to him
from time to time by the President in a competent manner, (ii) negligence or willful
misconduct by the Executive in the performance of his duties as an employee of the
Company or the inability of the Executive to maintain a professional relationship with
the Company’s staff and related persons, (iii) the charging or indictment of the
Executive in connection with a crime, (iv) the affiliation, directly or indirectly, of
the Executive, for his profit or financial benefit, with any person or entity that
competes, in any material way, with the Company, (v) the disclosing or using of any
confidential information or trade secrets of the Company at any time by the Executive,
except as required in connection with his duties to the Company, (vi) the breach by
the Executive of his fiduciary duty or duty of trust to the Company, (vii) chronic
absenteeism, (viii) substance abuse, or (ix) any other material breach by the
Executive of any of the terms or provisions of this letter or any other agreement
between the Company and the Executive, which other material breach is not cured within
ten (10) business days of notice by the Company or which is not curable.






In order to comply with the Immigration Reform and Control Act of 1986 and applicable state law,
you will be required to verify your legal right to work in the United States through the
presentation of documents establishing your identity and authorizing your right to work in the
United States within three business days of beginning your new position.



Finally, as a condition of your employment with the Company, you must also execute the Company’s
Business Protection Agreement, a copy of which will be provided to you. Like all Company
employees, you may in the future be required, in the Company’s reasonable discretion, to execute
agreements relating to other Company policies or substantive matters. Also, as with all of the
Company’s offers to prospective employees, this offer is contingent upon satisfactory completion of
those portions of the Company’s standard due diligence (including background and reference checks
as may be applicable to your prospective employment).



This letter supersedes any previous correspondence or offer and contains the Company’s entire
offer. This letter does not constitute an employment contract, nor should it be construed as a
guarantee that employment or any benefit program or other term or condition of employment will be
continued for any period of time. Any salary figures are
not intended to create an employment contract for any specific period of time and thus your
employment is at-will; either you or the company can terminate it at anytime with or without cause.








 


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Confidential




Should you agree and accept the Company’s offer, by doing so, you represent and warrant that you
are free to accept this offer of employment and that you doing so does not breach any contract or
agreement which you have any other entity and is not in violation of any legal duty you have to any
other entity.



Mark, we look forward to you joining the Champions Biotechnology team. We believe you will enjoy
the challenges and opportunities that lie ahead in our dynamic business and that you have the
skills and talent necessary to be a strong contributor to our mutual growth.



To formally accept this offer, please sign, date and return this letter via PDF or facsimile
(480-656-8326) and mail the original to my attention by no later than January 8, 2009 confirming
your acceptance of this offer. Should you have any questions, please do not hesitate to call me.
Congratulations on your new position, and I look forward to your contribution to Champions
Biotechnology. If you have any questions please do not hesitate to contact me.



Sincerely,




	 	 	 
	/s/ Douglas D. Burkett
 

Douglas D. Burkett, Ph.D.

President

Champions Biotechnology, Inc.


	 	 






Accepted:



	 	 	 	 	 	 	 
	 

Mark R. Schonau

	 	 
	 	 

Date
	 	 












 


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