EXHIBIT
10.4

EMPLOYMENT OFFER LETTER TO
 AILEEN RYAN DATED JUNE 19,
2006

Dear Aileen:

On behalf of Vion
Pharmaceuticals, Inc. I am very pleased to offer you the position of
Vice President of Regulatory Affairs. In this capacity you will report
directly to me, as President of Vion. You have represented and
warranted to Vion that you are free to enter into employment with Vion
as its Vice President of Regulatory Affairs as contemplated hereby, and
to perform the duties required of such position, and that there are no
employment contracts or understandings, restrictive covenants or other
restrictions, whether written or oral, preventing the performance of
such duties.

Your starting salary will be two hundred and fifteen
thousand dollars ($215,000.00) per annum. You will also be eligible to
receive a hire bonus of fifty thousand dollars ($50,000), subject to
normal employment withholding taxes, which will be paid to you as
follows:

$10,000 – within 30 days of hire
date

$10,000 – 1st pay period of January,
2007

$10,000 – 1st pay period of July,
2007

$20,000 – 1st pay period of December,
2007

At the time of each installment of the hire bonus payment
you must be an active, full time employee of Vion. In addition, you
will be reimbursed for the after tax amount of a sixteen thousand
dollar ($16,000) ‘‘Positive Performance
Payment’’ that you are actually required to repay to
Bayer, as per the terms of the bonus agreement between you and Bayer
dated October  20,  2004. As soon as we receive relevant
tax advice, Vion will either pay you an amount sufficient to provide
you with the net amount to be repaid to Bayer or, at our election, we
will make payment on your behalf directly to Bayer for the amount of
your obligation. You are also eligible for an annual (12 month)
performance bonus of up to 25% of base salary , for which we
will mutually agree on performance goals for your position. As a
full-time employee of Vion Pharmaceuticals, you will be eligible for
our standard benefits package, a summary of which is attached.

You will be granted, within 30 days of the hire date, 93,333 shares
of restricted stock under the Company’s 2005 Stock Incentive
Plan. In the event that you are still employed by the Company and your
job performance meets the standards of the Board of Directors and the
Chief Executive Officer of the Company, management would also recommend
that the Compensation Committee grant an additional 93,000 shares of
restricted stock (subject to adjustment for stock splits, stock
dividends, recapitalizations and other similar events) to you under the
Company’s 2005 Stock Incentive Plan in each of January
2007 and January  2008. The vesting of such grants would parallel
the vesting of the initial grant of restricted shares. The terms and
conditions of this restricted stock grant will be governed by the 2005
Stock Incentive Plan and an agreement which will provide for vesting of
these options at the earliest of FDA approval of Cloretazine, a change
of control of Vion as defined in the Plan, or December, 2008.

Your employment by Vion will continue at will. At will means that
either you or Vion may terminate the employment relationship at any
time for any reason. In no event shall your employment be construed as
a contractual relationship between Vion and you, or guaranteeing
employment for any specific period of time

As of your first day
of employment, Vion will enter into an agreement with you pursuant to
which you, as an officer of the Company, would be entitled to a lump
sum severence if your employment were terminated due to a
‘‘change of control’’. Such a payment under
these conditions would be equal to the sum of twelve (12) months of the
officer’s monthly base salary in effect at the time of the date
of termination plus the average of the last two cash bonus payments
made to the officer prior to the change of control. Under this
situation, you would also be entitled to all payments 










necessary to provide you with group health
insurance benefits substantially similar to those which you were
receiving immediately prior to the date of termination until the
earlier of 18 months after such termination or the date you had
obtained new full-time employment.

Consistent with the
Company’s policies and in accordance with the agreements signed
by all other Company employees, you will be required to execute and be
bound by the terms of the Proprietary Information and Inventions
Agreement. If you accept this offer, the terms described in this letter
and in the Proprietary Information and Inventions Agreement, as well as
all other employment policies of Vion, whether written or oral, shall
be the terms of your employment. Any additions or modifications of
these terms must be in writing and signed by yourself and me.

We
are very enthusiastic about the prospect of having you join Vion, which
we believe to be one of the more exciting young companies in the
pharmaceutical industry. We are confident that Vion will succeed. It
will succeed faster and more surely if we can attract people of your
quality and track record. If you are in agreement with the terms and
accept this offer, please return a signed copy of this letter and the
Proprietary Information and Inventions Agreement to
me.

Sincerely yours,


/s/ Howard
B. Johnson                


Howard B.
Johnson

President & CFO





							
	Agreed
to this 22nd day of June,
2006			by			/s/ Aileen
Ryan
	 			 			Aileen
Ryan