Document:

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
	 	 

 

Page 4Exhibit 10.5

Exhibit 10.5

CONSULTING AGREEMENT

THIS CONSULTING AGREEMENT (“Agreement”) made this May 18, 2009, by and between James Martell,
(the “Consultant”) whose address is 2200 Wilson Blvd., Suite 102-316, Arlington, VA, and CHAMPIONS
BIOTECHNOLOGY, INC. (the “Company”) whose principal office is Science & Technology Park at Johns
Hopkins, 855 N. Wolfe Street, Baltimore, MD.

RECITALS:

WHEREAS, Consultant is the Founder and Director of the Company and as such has provided a
valuable direction and purpose to the Company since its inception in 1985;

WHEREAS, Consultant’s knowledge and insights continue to be important to the future
development and growth of the Company;

WHEREAS, Consultant was formerly Chairman, President, Chief Executive Officer and the Chief
Administrative Officer of the Company, and the Company now desires to retain Consultant to perform
certain consulting services;

WHEREAS, the Parties wish to enter into this Agreement to set forth the obligations and
responsibilities of each in connection with their contractual relationship;

NOW, THEREFORE, in consideration of the mutual covenants contained herein and other good and
valuable consideration, the Parties hereto agree as follows:

1. Duties and Status.

1.1. Engagement. The Company hereby engages Consultant to serve the Company, and
Consultant hereby accepts such engagement, upon the terms and conditions hereinafter set forth.

1.2. Scope of Services. During the term of this Agreement, Consultant shall devote
such time and his best commercial efforts to faithfully, loyally and competently perform all of his
duties under this Agreement, and the Company will provide all necessary information and other
support appropriate to the performance of the services. Consultant will report to the President of
the Company or his designee and shall, at all times, exercise his own discretion and control with
respect to each and every project to which he is assigned by the Company. Consultant will not take
any action which may interfere with, or may adversely affect the business, properties or prospects
of the Company or any of its affiliates, or the performance of his duties hereunder in any way.

1.3. Responsibilities. During the Term (as hereinafter defined) of this Agreement,
Consultant will carry out projects as assigned by the President or his designee that may include:
(i) assistance in designated projects concerning aspects of the Company’s Personalized Oncology
business; (ii) assistance with designated projects concerning aspects of
business development for the Company, and (iii) being reasonably available at convenient times
to confer with the Company regarding historical, strategic and tactical issues that arise.

 

 

1.4. Time Requirements. It is expected that Consultant shall generally devote at
least 25 hours per week to his services to the Company under this Agreement. It is understood that
Consultant is free to work for and/or provide services to any other business and/or entity provided
such work or services shall not interfere with Consultant’s provision of services to the Company
pursuant to this Agreement, and further provided that such work or services shall not violate his
duties under the Company’s Business Protection Agreement.

1.5. Contracting. Consultant shall not possess authority to bind the Company in any
manner whatsoever, including but in no way limited to binding the Company to contracts. Consultant
shall not enter into any contracts of any kind, verbal or written, on behalf of the Company or in
furtherance of the business of the Company.

1.6. Hold Harmless, Defend, and Indemnify. Consultant hereby agrees to defend,
indemnify, and hold the Company harmless from and for any and all claims, lawsuits, administrative
complaints, criminal complaints, damages, attorneys’ fees, litigation costs, and any other harm
arising out of or in any way relating to Consultant’s breach of any and all undertakings, duties,
and/or restrictions on authority set forth in this Agreement.

2. Term. The term of this Agreement shall commence on May 18, 2009 (the “Effective
Date”) and shall continue until the close of business on the day immediately preceding the second
anniversary of the date of the Effective Date (the “Original Term”). This Agreement will be
renewed at the expiration of the Original Term only in the event that the parties enter into a new
written consulting Agreement, and shall not automatically renew or otherwise operate as a hold-over
without express written consent of all the parties.

3. Compensation and Reimbursement. As compensation for Consultant’s services
hereunder, Consultant shall be paid the sum of $100,000 annually, payable in twelve equal monthly
installments of $8,333, or pro rata for each month or portion of a month in the event that
Consultant provides services for less than one full year. The Company shall make no deductions or
withholdings from this amount and shall issue a Form 1099 to account for all such payments.
Consultant understands and agrees that he shall be responsible for any and all tax consequences of
these independent contractor payments, including assessments and/or penalties imposed by taxing
authorities.

Consultant shall not be entitled to participate in any employee benefit programs implemented by the
Company for the benefit of any of its full-time employees, including, without limitation, any
retirement plans, disability insurance, life insurance, health and medical insurance, and shall not
be paid vacation, holiday or sick time.

 

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3.2. Reimbursement. The Company shall reimburse Consultant for any reasonable and
necessary expenses actually and properly incurred by Consultant in connection with performance of
services described in 1.2 and 1.3 upon presentation of such expenses per Company policy.
Notwithstanding the preceding, any expenses over $350 will be subject to prior approval by the
Company.

4. Consultant’s Representations and Warranties.

4.1. No Prior Agreements. Consultant represents and warrants that he is not a party
to or otherwise subject to or bound by the terms of any contract, agreement or understanding which
in any manner would limit or otherwise affect his ability to perform contractor services hereunder,
including without limitation any contract, agreement or understanding containing terms and
provisions restricting competition, protecting confidential information, or relating to ownership
or assignment of intellectual property.

4.2. Confidential Information of Others. Consultant represents warrants and covenants
he will not disclose to the Company or otherwise use, in the course of his engagement with the
Company, any confidential information which he is restricted from disclosing or using pursuant to
any other agreement or duty to any other person.

4.3. Non-Competition Covenants. Consultant represents and warrants to the Company
that he is not bound by any non-competition or non-solicitation agreement or similar restriction
which would prohibit him from accepting engagement with the Company or performing any contractor
services on behalf of the Company.

4.4. No Restrictions. Consultant represents that his performance of services
hereunder does not and will not conflict with or breach any agreement or arrangement he has with
any third party. In the event that Consultant enters into a relationship described above,
Consultant shall immediately provide written notice to the Company of such relationship, subject to
the provision that such notification shall not breach confidentiality provisions or understandings
regarding confidentiality. Consultant will notify Company in the event that he becomes aware of a
conflict between any policies and obligations of any other client or employer and this Agreement to
the extent that such notification does not breach confidentiality provisions or understandings
regarding confidentiality.

4.5. Return of Company Property. Consultant agrees that upon termination of
engagement he will promptly return to the Company all Confidential Information, all Intellectual
Property of the Company and all other property of the Company, including all correspondence,
manuals, notebooks, lists of customers and suppliers, prototypes, computer programs, disks and any
documents, materials or property, whether written or stored on computerized medium, and all copies
in Consultant’s possession or control, he shall not shall not take any action to preserve or regain
access to such information through any means, including but not limited to access to the Company’s
facilities or through a computer or other digital or electronic means, and shall promptly pay all
amounts due, owing or otherwise payable by Consultant to the Company. Consultant expressly
authorizes the Company to withhold any amounts payable to him, including for wages, compensation,
reimbursement and otherwise, until he has complied with this Section.

 

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4.6. Business Protection Agreement. Consultant acknowledges that this Agreement is
contingent upon Consultant’s acceptance of and agreement to be bound by all of the terms and
provisions of the Company’s Business Protection Agreement, a copy of which has been delivered to
Consultant. Accordingly, Consultant covenants and agrees to be bound
and abide by all terms and provisions of the Business Protection Agreement, regardless of
whether such agreement has ever been signed or delivered by Consultant.

4.7. Company’s Remedies for Breach. Consultant acknowledges that, as the violation by
Consultant of the provisions of Section 4 would cause irreparable injury to the Company, and there
is no adequate remedy at law for such violation, the Company shall have the right in addition to
any other remedies available, at law or in equity, to seek to enjoin Consultant in a court of
equity from violating such provisions. Consultant hereby waives any and all defenses he may have
on the ground of lack of jurisdiction or competence of the court to grant such an injunction or
other equitable relief.

5. Termination. Either party may terminate this Agreement for any reason or for no
reason upon 90 days prior written notice, provided, however, that any termination by the Company
must receive the prior written approval of David Sidransky, the Chairman of the Board of Directors
of the Company. Upon the termination of Consultant’s engagement for any reason or no reason, the
Company shall have no further obligation to Consultant whatsoever except as expressly stated in
this Section. The Company may immediately terminate this Agreement upon Consultant’s breach of any
provisions, undertakings, duties, and/or restrictions on authority set forth in this Agreement.

6. Relationship. Consultant acknowledges and agrees that he is acting solely as an
independent contractor hereunder and is not an employee of the Company. Consultant will not be
eligible for any employee benefits and will be responsible for payment of any taxes relating to
services provided hereunder. Consultant shall have no authority to enter into contracts which bind
the Company or create any obligation on behalf of the Company except as authorized and approved by
the Company. Under no circumstances shall Consultant hold himself out to be an employee of the
Company. This Agreement shall not be construed as creating any partnership, joint venture or any
other form of joint operation or organization wherein the parties hereto are deemed to be partners.

 

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7. Miscellaneous.

7.1. Entire Agreement. The Company has made no representations other than as set
forth herein. No modification or amendment of this Agreement, nor waiver of any of its provisions,
shall be valid or enforceable unless in writing and signed by all parties.

7.2. Benefit. This Agreement shall be binding upon and inure to the benefit of the
Company, its successors and assigns. This Agreement shall be binding upon Consultant and his
heirs, personal and legal representatives, and guardians, and shall inure to the benefit of
Consultant. This Agreement may not be assigned by Consultant in whole or in part.

7.3. Separability. The invalidity or unenforceability of any provision of this
Agreement shall not affect any other provision hereof, and the Agreement shall be construed in all
respects as though such invalid or unenforceable provisions were omitted.

7.4. Notices. Any notice required to be given pursuant to this Agreement shall be in
writing and delivered in person, or sent by certified mail, return receipt requested, if to the
Company, at its principal office and if to Consultant, at his residence address as contained in the
records of the Company.

7.5. Governing Law; Waiver of Jury Trial; Jurisdiction. This Agreement has been made
in and shall be governed by and construed in accordance with the laws of the State of Maryland,
without regard to any conflicts of laws principles which would apply the law of another
jurisdiction. The parties hereby waive trial by jury in any action arising under this Agreement.
Any action arising under this Agreement shall be brought in and shall be subject to the exclusive
jurisdiction and venue of the state or federal courts located in Maryland, except where injunctive
relief is sought in any other jurisdiction in connection with the enforcement of this Agreement.

7.6. Waiver. The failure of any party to fully enforce any provision hereof shall not
be deemed to be a waiver of such provision or any part thereof, and the waiver by any party of any
provision hereof shall not be deemed to be a waiver of any other provision hereof or a waiver with
respect to any other incidence of non-compliance therewith. No waiver shall be effective unless in
writing and signed by the party so waiving.

7.7. Survival. The provisions of Section 4 hereof shall survive the termination of
this Agreement and Consultant’s engagement hereunder.

[Signature Page Follows]

 

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IN WITNESS WHEREOF, the parties have executed this Agreement under seal, with the intent that
this be a sealed instrument, on the day and year first above written.

COMPANY: Champions Biotechnology, Inc.

By:                                          (SEAL)

CONSULTANT: James Martell.

                                                            

 

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