Exhibit
10.4 Employment Agreement dated August 23, 2019 between the Company and Mr. Amit Shah


 


EMPLOYMENT
AGREEMENT


 


This
Employment Agreement (“Agreement”) is entered into as of August 23, 2019, between Mateon Therapeutics, Inc., a Delaware
corporation (“Mateon or the Company”), and Amit Shah (“Executive”).


 


W
I T N E S S E T H:


 


WHEREAS,
Mateon and Executive desire to enter into an employment agreement relating to the position of Mateon’s Chief Financial Officer & Principal Accounting Officer (“CFO”), pursuant to which position Executive shall report to the Chief Executive
Officer (“CEO”) or Board of Directors of Mateon (“Board”). Executive’s initial responsibilities
include providing leadership and direction for the accounting and finance department, external and internal financial reporting,
developing and ensuring maintenance of internal controls commensurate with the size of the Company, preparation of budgets, forecasts
and managing them against actual and any other responsibilities that are mutually agreed to by the CEO and CFO.


 


NOW,
THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby mutually acknowledged, Mateon
and Executive hereby agree as follows:


 


1.
Employment


 


1.1
Executive shall serve in the capacity of CFO, and shall have the duties, responsibilities and authority assigned to Executive
by the CEO or the Board consistent with such position. Executive shall report directly to the CEO.


 


1.2
Executive, so long as he is employed hereunder, (i) shall devote his full professional time and attention to the services required
of him as an employee of Mateon, except as otherwise agreed and except as permitted in accordance with paid vacation time subject
to Mateon’s existing vacation policy, and subject to Mateon’s existing policies pertaining to reasonable periods of
absence due to sickness, personal injury or other disability, (ii) shall use his best efforts to promote the interests of Mateon,
and (iii) shall discharge his responsibilities in a diligent and faithful manner, consistent with sound business practices.


 


2.
Term


 


The
term of Executive’s employment under this Agreement shall commence as of August 1st and shall continue until terminated
by either party in accordance with Section 6 hereof (the “Employment Term”).


 


3.
Base Salary; Stock Options


 


3.1
During the Employment Term, Executive shall receive an annual base salary in the amount of $320,000 (such amount as adjusted,
from time to time, the “Base Salary”), payable in accordance with Mateon’s payroll schedule from time to time
in effect. Executive’s salary shall be reviewed annually by the Board. Executive shall be paid only 60% of the Base Salary
with the Company’s normal payroll policies until the occurrence of a financing event. For purposes of this Amendment to
this Agreement, the term “Financing Event” means: (a) the closing of an equity or debt financing with gross proceeds
equal to or greater than $4,000,000, (b) the execution of a licensing or collaboration agreement with an up-front payment equal
to or greater than $4,000,000, (c) any combination of (a) and (b) whereby the gross proceeds are equal to or greater than $4,000,000,
Immediately upon the closing of a Financing Event, provided Executive remains employed with the Company as of the date of the
closing of the Financing Event, Executive’s salary shall be increased to 100% of Base Salary. The Compensation Committee
of the Board (“Compensation Committee”) will consider whether any additional compensation shall be paid to Executive
related to the period of Reduced Salary. Executive understands and agrees that Executive has already been paid all wages due and
owing as of the date of this Agreement.


 




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3.2
Mateon shall grant to Executive, subject to approval by the either the Board or the Compensation Committee of the Board, pursuant
to the Mateon Inc.’s 2015 and 2017 Equity Incentive Plans (the “Stock Plan”), 148,837 restricted shares of common
stock of Mateon, $.01 par value per share. The Company will compensate the Executive for the taxes incurred on the restricted
shares upon receipt of documentation as to the amount of taxes incurred. Such grant shall be made at a price equal to the Fair
Market Value (as defined in the Stock Plan) on the date of the grant, and shall fully vest at the one year anniversary of employment.
Thereafter, Executive will be a participant of the Stock Plan, and will be eligible to receive an annual grant of restricted stock
as approved by the Board or Compensation Committee and which shall contain the customary terms and provisions of such grants generally
to key executives under the Stock Plan.


 


3.3
Mateon shall grant to Executive, subject to approval by the Board or the Compensation Committee, pursuant to the Stock Plan, an
incentive option to purchase 223,256 shares of Mateon common stock, $.01 par value per share. Such option shall have an exercise
price equal to the Fair Market Value (as defined in the Stock Plan) on the date of grant of such option, and shall vest and become
exercisable after one year of employment. Thereafter, Executive will be a participant of the Stock Plan, and will be eligible
to receive an annual grant of an equivalent number of options, which shall contain the customary terms and provisions of options
granted generally to key executives under the Stock Plan.


 


3.4
Executive shall be entitled to a 40% Annual Bonus based upon roles and objectives predetermined by, and at the discretion of,
the Board or Compensation Committee.


 


3.5.
These restricted shares of common stock of Mateon granted under Section 3.2 and the incentive stock option granted under Section
3.3 are not in place of but rather are in addition to the shares of Mateon stock already owned by the Executive. The vesting of
the restricted shares of common stock of Mateon under Section 3.2 and the incentive stock option under Section 3.3 will accelerate
and be fully vested upon a Change of Control as defined in the Stock Plan.


 


4.
Benefits 


 


Executive
shall be entitled to participate in or receive benefits under any employee benefit plan, arrangement or perquisite generally made
available by Mateon during the Employment Term to its executives and key management employees. These benefits shall consist of
a minimum paid family health insurance, including dental and vision insurance and any other benefits granted by Mateon and four
(4) weeks of Personal Time Off (“PTO”) per year, subject to a maximum accrual of eight (8) weeks.


 


5.
Business Expenses


 


Executive
shall be entitled to receive prompt reimbursement for all reasonable and customary expenses incurred by him in performing services
hereunder during the Employment term; provided that such expenses are incurred and accounted for in accordance with the policies
and procedures established by Mateon.


 


6.
Termination


 


6.1
Mateon may terminate Executive’s employment by giving Executive thirty (30) days’ written notice, subject to all provisions
of this Agreement. Notwithstanding the foregoing, Mateon may terminate Executive’s employment for Cause (as defined in section
6.7 thereof) without prior notice.


 


6.2
(a) Executive may voluntarily resign from employment with the Company upon written notice to the Company specifying the effective
date of such resignation, which effective date shall not be less than thirty (30) days from the date of such notice. Upon effective
date of Executive’s resignation, the Company shall have no further obligations to perform duties as specified in Section
1 of this Agreement.


 


(b)
If Executive terminates his employment following material breach of the Agreement by Mateon, which breach remains uncured thirty
(30) days after written notice thereof is received by Mateon (a “Termination with Good Reason”), Executive shall be
treated as if his employment was terminated by Mateon other than for Cause.


 


6.3
If Mateon terminates Executive for Cause or the Executive resigns his employment other than in a Termination with Good Reason,
Executive shall be entitled to receive in a lump sum payment as soon as practicable after the Termination Date an amount equal
to all accrued and unpaid Base Salary (the “Unpaid Salary”), a lump sum payment for all accrued and unused PTO (the
“Unpaid PTO”), and reimbursement of any unreimbursed business expenses in accordance with the Company’s reimbursement
policies.


 




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6.4
If Executive’s employment is terminated by Mateon other than for Cause (as defined below) or in the event of a Termination
with Good Reason, then Mateon shall provide to Executive as soon as practicable after the date of notice of Executive’s
termination of employment:


 


	 	(a)	The
    Unpaid Salary and Unpaid PTO, as soon as practicable after the Termination Date; plus
	 	(b)	a
    lump sum cash payment equal to twelve (12) months of Executive’s then-current Base Salary; and 
	 	(c)	All
    stock options, stock appreciation rights, restricted stock, and other incentive compensation granted to the Executive by Mateon
    shall, to the extent vested, remain exercisable in accordance with the terms of the Stock Plan (or prior applicable plan)
    and the agreement entered pursuant thereto, and the Executive may exercise all such vested options and rights, and shall receive
    payments and distributions accordingly. 
	 	(d)	All
    insurance benefits or COBRA coverage, fully paid by Mateon, for a period of twelve (12) months following the Executive’s
    termination of employment.


 


6.5
If, following any Change in Control (as such term will be defined in the Stock Plan) and prior to expiration of one (1) year from
the date of such Change in Control, (1) Executive’s employment is terminated by Mateon (other than for Cause) or (2) in
the event of a Termination with Good Reason, then


 


	 	(a)	Mateon
    shall provide to the Executive: 


 


	 	a.	The
    Unpaid Salary and accrued unpaid PTO, as soon as practicable after the Termination Date; plus 
	 	 	 
	 	b.	An
    amount equal to twelve (12) months of Executive’s then current Base Salary; and 


 


	 	(b)	all
    stock options, stock appreciation rights, restricted stock, and other incentive compensation granted to the Executive by Mateon
    shall, to the extent vested, remain exercisable in accordance with the terms of the stock Plan (or prior applicable plan)
    and the agreement entered pursuant thereto, and the Executive may exercise all such vested options and rights, and shall receive
    payments and distributions accordingly. The absence of a stock plan will not be a reason not to allow Executive to exercise
    all such vested options and rights, and shall receive payments and distributions. 
	 	(c)	All
    insurance benefits or COBRA coverage, fully paid by Mateon, for a period of twelve (12) months following the Executive’s
    termination of employment.


 


6.6
The foregoing payments upon Executive’s termination shall constitute the exclusive payments due Executive upon termination
from his employment with Mateon under the Agreement or otherwise, provided, however that except as stated above, such payments
shall have no effect on any benefits which may be payable to Executive under any plan of Mateon which provides benefits after
termination of employment.


 


6.7
For the purposes of this Agreement, the term “Cause” shall mean any of the following:


 


	 	(a)	the
    (i) continued failure by Executive to perform his duties on behalf of Mateon’s if Executive fails to remedy that breach
    within ten (10) days of Mateon’s written notice to Executive of such breach; or (ii) material breach of any other provision
    of this Agreement by the executive, if the Executive fails to remedy that breach within ten (10) days of Mateon’s written
    notice to Executive of such breach; or
	 	(b)	any
    act of fraud, material misrepresentation or material omission, misappropriation, dishonesty, embezzlement or similar conduct
    against Mateon or any affiliate, or conviction of Executive for a felony or any crime involving moral turpitude. 


 


7.
No Solicitation; Confidentiality; Work for Hire


 


7.1
For a period of one year after the Termination Date, neither the Executive nor any Executive-Controlled Person (as defined below)
will, without the prior written consent of the Board, directly or indirectly solicit for employment, or make an unsolicited recommendation
to any other person that it employ or solicit for employment any person who is or was, at any time during the nine (9) month period
prior to the Termination date, an officer, executive or key employee of Mateon or any affiliate of Mateon. As used in this Agreement,
the term “Executive-Controlled Person” shall mean any company, partnership, firm or other entity as to which Executive
possesses, directly or indirectly, the power to direct or cause the direction of the management and policies of such entity, whether
through the ownership of voting securities, by contract or otherwise.


 




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7.2
(a) Executive acknowledges that, through his status as CFO of Mateon, he has, and will have, possession of important, confidential
information and knowledge as to the business of Mateon and its affiliates, including, but not limited to, information and knowledge
as to the business of Mateon and its affiliates, including, but not limited to, information related to drugs and compounds developed
or under development by the Company, financial results and projections, future plans, the provisions of other important contracts
entered into by Mateon and its affiliates, possible acquisitions and similar information proprietary to Mateon and its affiliates
(collectively, “Confidential Information”). Executive agrees that he shall not, so long as the Company remains in
existence, divulge, communicate, furnish or make accessible (whether orally or in writing or in books, articles or any other medium)
to any individual, firm, partnership or corporation, any knowledge or information with respect to Confidential Information directly
or indirectly useful in any aspect of the business of Mateon or any of its affiliates. As used in the preceding sentence, “Confidential
Information” shall not include any knowledge of information that: (i) is or becomes available to others, other than as a
result of breach by Executive of this Section 7.2; (ii) was available to Executive on a nonconfidential basis prior to its disclosure
to executive through his status as an officer or employee of Mateon or any affiliate; (iii) becomes available to Executive on
a nonconfidential basis from a third party (other than Mateon, any affiliate or any of its of their representatives) who is not
bound by any confidentiality obligation to Mateon or any affiliate; (iv) was known by the Executive prior to his employment by
Mateon as evidenced by Executive’s pre-existing written records; (v) was not maintained as confidential information by Mateon;
(vi) is otherwise information known or available within Mateon’s industry; or (vii) is information that is legally compelled,
by applicable law, to be disclosed by Executive, provided, however, that in such an event Executive shall give prompt notice to
Mateon of such requirement so that Mateon may seek a protective order or other appropriate remedy.


 


(b)
All memoranda, notes, lists, records and other documents or papers (and all copies thereof), including such items stored in computer
memories, on microfiche or by any other means, made or complied by or on behalf of Executive or made available to him relating
to the business of Mateon or any of its affiliates are and shall be and remain Mateon’s property and shall be delivered
to Mateon promptly upon the termination of Executive’s employment with Mateon or at any other time on request and such information
shall be held confidential by Executive after the termination of his employment with Mateon.


 


7.3
Executive grants the Company and each affiliate of the Company, as appropriate, all rights in and to the contribution made by
Executive to any projects or matters on which Executive worked during the Employment Term. Executive acknowledges that each such
matter and the contribution made by Executive thereto shall constitute a work made for hire within the meaning of the United States
copyright law and other applicable laws. The Company reserves all rights with respect to information relating to the Company’s
products, including, but not limited to, the right to apply for patents.


 


7.4
The provisions contained in this Section 7 as to the time periods, scope of activities, persons or entities affected, and territories
restricted shall be deemed divisible so that, if any provision contained in this Section 7 is determined to be invalid or unenforceable,
such provisions shall be deemed modified so as to be valid and enforceable to the full extent lawfully permitted.


 


7.5
Executive agrees that the provisions of this Section 8 are reasonable and necessary for the protection of Mateon and that they
may not be adequately enforced by an action for damages and that, in the event of a breach thereof by Executive or any Executive-Controlled
Person, Mateon shall be entitled to apply for and obtain injunctive relief in any court of competent jurisdiction to restrain
the breach or threatened breach of such violation or otherwise to enforce specifically such provisions against such violation,
without the necessity of the posting of any bond by Mateon. Executive further covenants under this Section 8, Mateon shall be
entitled to an accounting and repayment of all profits, compensation, commissions, remuneration or other benefits that Executive
directly or indirectly has realized and/or may realize as a result of, growing out of or in connection with any such violation.
Such a remedy shall, however, be cumulative and not exclusive and shall be in addition to any injunctive relief or other legal
equitable remedy to which Mateon is or may be entitled.


 




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8.
Taxes


 


Any
amounts payable to the Executive hereunder shall be paid to Executive subject to all applicable taxes required to be withheld
by Mateon pursuant to federal, state or local law. Executive shall be solely responsible for all taxes imposed on the Executive
by reason of his receipt of any amounts of compensation or benefits payable hereunder.


 


9.
Indemnification


 


Mateon
has entered into a separate Indemnification Agreement with Executive which shall survive the execution and delivery of this Agreement
and remain in full force and effect.


 


10.
Attorney’s Fees and Expenses


 


Mateon
and the Executive agree that in the event of litigation arising out of or relating to this Agreement, the prevailing party shall
be entitled to reimbursement from the other party to the prevailing party’s reasonable attorney fees and expenses.


 


11.
Amendments


 


This
Agreement may not be altered, modified or amended except by a written instrument signed by each of the parties hereto.


 


12.
Assignments


 


Neither
this Agreement not any of the rights or obligations hereunder shall be assigned or delegated by any party hereto without the prior
written consent of the other party; provided, however, that any payments and benefits owed to Executive under this Agreement shall
insure to the benefit of his heirs and personal representatives.


 


13.
Waiver


 


Waiver
by any party hereto of any breach or default by any other party of any of the terms of this Agreement shall not operate as a waiver
of any other breach or default, whether similar to or different from the breach or default waived.


 


14.
Severability


 


In
the event that any one or more of the provisions of this Agreement shall be or become invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions contained herein shall not be affected thereby.


 


15.
Notices


 


All
notices and other communications provided for in this Agreement shall be in writing and shall be deemed to have been duly given
when personally delivered or when mailed by registered mail, return receipt requested, postage prepaid, addressed as follows:


 


If
to Executive, to him as follows:


 


Name:
Amit Shah.


Address:
[***]


[***]


 


If
to Mateon, to it as follows:


 


Name:
Board of Directors


Address:
Mateon Therapeutics, Inc.


29397
Agoura Road, Suite 107


Agoura
Hills, CA 91301


 


Or
to such other address or such other person as Executive or Mateon shall designate in writing in accordance with this Section 15,
except that notices regarding changes in notices shall be effective only upon receipt.


 




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16.
Headings


 


Headings
to Sections in this Agreement are for the convenience of the parties only and are not intended to be a part of, or to affect the
meaning or interpretation of, this Agreement.


 


17.
Governing Law


 


This
Agreement shall be governed by the laws of the California without reference to the principles of conflict of laws. Each of the
parties hereto consents to the jurisdiction of the federal and state courts of the California in connection with any claim or
controversy arising out of or connected with this Agreement, and said courts shall be the exclusive forum for the resolution of
any such claim or controversy. Service of process in any such proceeding may be made upon each of the parties hereto at the address
of such party as determined in accordance with Section 15 of this Agreement, subject to the applicable rules of the court in which
such action is brought.


 


18.
Entire Agreement


 


This
Agreement contains the entire agreement between Executive and Mateon with respect to all matters relating to Executive’s
employment with Mateon and, as of the date hereof, will supersede and replace any other agreements, written or oral, between the
parties relating to the terms or conditions of Executive’s employment with Mateon, provided, however, that nothing in this
Agreement shall amend or affect any stock shares or stock options previously granted to executive.


 


IN
WITNESS WHEREOF, Mateon and Executive have caused this Agreement to be executed as of the date first above written.


 


	 	 	/s/
    Amit Shah
	 	Name:	Amit
    Shah
	 	 	 
	 	MATEON
    THERAPEUTICS, INC.
	 	 	 
	 	 	/s/
    Vuong Trieu
	 	Name:	Vuong
    Trieu
	 	Title:	President
    & CEO


 




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