Document:

Employment Agreement between the Company and Mark Schlei

 Exhibit 10.1 
 Sparton Corporation 
 425 North Martingale Road 

Suite 2050 

Schaumburg, Illinois 60173 
 800.772.7866 
 www.sparton.com 

 
 

 
 EXECUTIVE EMPLOYMENT AGREEMENT 

THIS AGREEMENT shall be effective as of the first day of employment which will be agreed upon by both parties (“the Effective
Date”), and is made between SPARTON CORPORATION, an Ohio corporation, whose headquarters are located at 425 N. Martingale Road, Suite 2050, Schaumburg, IL 60173, hereafter called “the Corporation,” as the employer, and Mark Schlei,
hereafter called “the Executive,” as the employee. 
 WHEREAS: 

 

	 	(a)	The Corporation wishes to retain the services of the Executive in the capacity of a Chief Financial Officer (“CFO”); and 

 

	 	(b)	The Executive wishes to be employed by the Corporation in that capacity; and 

 

	 	(c)	The parties desire to set forth the terms and conditions of the employment of the Executive by the Corporation in writing; 

NOW THEREFORE, in consideration of the mutual covenants and agreements contained herein, and for other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows: 
 ARTICLE I 

EMPLOYMENT AND DUTIES 
 1.1 The Corporation hereby agrees to employ the Executive as CFO, and the Executive agrees to such employment, all in accordance with the express terms, conditions, duties and obligations set forth
in this Agreement. The parties agree that the relationship between the Corporation and the Executive created by this Agreement is that of employer and employee. 
 1.2 The Executive shall be based at the Corporation’s headquarters located in Schaumburg, IL, although significant travel will be required during the course of performing assigned job duties.
However, it is agreed upon by both parties that the Executive’s main place of employment shall be the Corporation’s headquarters located in Schaumburg, IL. 

 

 
  

 1.3 The Executive shall, during the term of this Agreement: 

 

	 	(a)	Perform all duties and responsibilities assigned to him as CFO, and shall report directly to the Chief Executive Officer (“CEO”). The Executive also will be
required to perform such other related duties and responsibilities as may be assigned to the Executive by the CEO, or his or her designee, from time to time, which related duties and responsibilities shall be in keeping with the general nature of
the duties of CFO or other leadership responsibilities as assigned. 

  

	 	(b)	Devote the whole of his working time, attention and ability to the performance of his employment duties and responsibilities as set out herein, and truly and faithfully
serve the best interests of the Corporation at all times. Executive’s duties may include providing services for both the Corporation and its affiliates. 

 

	 	(c)	The Executive understands and agrees that his duties will include his providing personal services to customers of the Corporation and the affiliates. The Executive
understands and agrees that, as a condition of performing services for such customers, it may be necessary to agree to reasonable restrictions imposed for the protection of the customer (including, without limitation, confidentiality restrictions),
and agrees to abide by such reasonable restrictions 

  

	 	(d)	The Executive acknowledges and agrees that he owes a duty of loyalty, fidelity, and allegiance under the laws of Ohio and applicable federal law to act at all times in
the best interests of the Corporation. In keeping with these duties, the Executive shall make full disclosure to the Corporation of all business opportunities pertaining to the Corporation’s business and shall not appropriate for the
Executive’s own benefit any such opportunities. 

 1.4 The Executive agrees to comply with all applicable laws and the
Corporation’s written policies or rules, exercise the utmost degree of integrity, honesty, fidelity and good faith, and perform his duties with the utmost degree of expertise, care and ability that may be expected of a person having the
education, training and experience equivalent to the education, training and experience of the Executive. 
 ARTICLE II

 TERM 
 2.1 The Executive’s employment shall be “at will” employment, with no set term. The employment relationship may be terminated by either the Executive or the Corporation at any time,
for any reason or for no reason, as is further set forth herein. 
 ARTICLE III 

COMPENSATION 

3.1 The Executive shall be paid a base salary of two hundred seventy thousand dollars ($270,000) per year, (the “Base Salary”) subject
to all applicable statutory withholding of which shall be paid in accordance with the Corporation’s regular payroll periods. The compensation payable to the Executive as contemplated by this Agreement shall be subject to annual review by the
CEO. 

  
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 3.2 In addition to the Base Salary provided for in Article 3.1 above, the Executive will be
eligible for: 
  

	 	(a)	A performance bonus target of forty percent (40%) of Executive’s Base Salary based upon the Corporation’s Short Term Incentive Plan (STIP) program
provided certain target objectives, which will be established by the CEO, have been attained. The bonus will be paid after a determination has been made regarding whether the required objectives were met, but in any event not later than ninety
(90) days after the end of the particular fiscal year for which the bonus is being paid. No bonus shall be due or payable to Executive if he is not continuously employed by the Corporation through and on the payment date of the bonus.

  

	 	(b)	The Corporation’s Long Term Incentive Plan (LTIP) under the terms and conditions set forth in that plan. On the Effective Date, the Corporation shall grant and
issue to Executive 15,000 shares of the Corporation’s common stock (the “Restricted Stock Award”). The grant of the Restricted Stock Award shall be subject to the terms and conditions contained in the Corporation’s standard Award
Agreement and the Amended and Restated Sparton Corporation Stock Incentive Plan. The grant of the Restricted Stock Award is expressly conditioned upon the Executive’s execution of the Award Agreement. 

3.3 The Corporation agrees before, during and after the Agreement Term to indemnify and hold harmless Executive (and advance him expenses) to the
fullest extent permitted by the Corporation’s articles of incorporation and/or by-laws, or if greater, in accordance with applicable law for actions or inactions of the Executive as an officer, director, employee or agent of the Corporation or
any affiliate or as a fiduciary of any benefit plan of any of the foregoing or as otherwise set forth in the applicable document. Notwithstanding the foregoing, however, the Corporation’s obligation to defend, indemnify and hold harmless
contained in this Section 3.3 shall not apply to claims between the Corporation and the Executive (including the Executive’s heirs, estate, executors and administrators) including, without limitation, disputes arising out of Article VII
Confidentiality and Covenant-Not-To-Compete. The Corporation also agrees to provide the Executive with directors’ and officers’ liability insurance coverage both during and, with regard to matters occurring during, employment or while
serving as a director of the Corporation or any affiliate, which coverage will be at a level at least equal to the level being maintained at such time for the then current officers and directors and shall continue until such time as suits can no
longer be brought against the Executive as a matter of law; provided, however, that the Corporation shall not be required to maintain such insurance coverage unless the Board determines that it is obtainable at reasonable cost. 

  
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 3.4 The provisions of this Agreement relating to compensation will be subject to the recovery
policies established by the Board, consistent with and pursuant to applicable federal law, the rules of the Securities and Exchange Commission (“SEC”) and any stock exchange on which stock of the of the Corporation is traded, and the
requirements of section 954 of the Dodd–Frank Wall Street Reform and Consumer Protection Act and final rules issued by the SEC thereunder (or implementing such provisions). 

ARTICLE IV 

BENEFITS 
 4.1
The Executive shall be entitled to receive or to participate in all employee benefits offered to the salaried employees of the Corporation for which he qualifies, under the same terms and subject to the same conditions as are then in effect for
other salaried employees, and as such benefits may exist from time to time during the period of his employment, including, without limitation, the Corporation’s medical, dental, vision, life/AD&D, disability plans, 401K plan, and any
applicable incentive programs. Nothing in this Section shall be construed to prevent the Corporation from revising the benefits generally provided to executives from time to time. 

ARTICLE V 

PAID TIME OFF 

5.1 The Executive is eligible for Paid Time Off (PTO) as described in the Corporation’s PTO policy. Eligibility for additional PTO in future
years will be in accordance with Corporation’s PTO policy. Any accrued but unused PTO remaining at the end of each calendar year shall also be subject to the provisions of the Corporation’s PTO policy. 

ARTICLE VI 

TERMINATION 

6.1 Either the Executive or the Corporation shall be entitled, upon written notice to the other party, to terminate this Agreement at any time,
for any reason or for no reason, as the Executive’s employment is “at will.” The Executive’s employment with the Corporation also may be terminated by the Corporation at any time for “just cause”. For the purposes of
this Agreement “just cause” shall mean any of the following: (a) gross negligence; (b) the commission by the Executive of any willful or intentional act which could reasonably be expected to injure the reputation, business or
business relationships of the Corporation or which could reasonably be expected to bring the Executive or the Corporation into disrepute, or the commission of any act which is a breach of the Executive’s fiduciary duties to the Corporation;
(c) conviction or commission of or the entry of a guilty plea or pleas of no contest to any felony, or to any other crime involving moral turpitude, dishonesty, theft, unethical or unlawful conduct; (d) breach of applicable
confidentiality, nonsolicitation or noncompetition provisions to which he is subject, including such provisions under this Agreement; (e) unsatisfactory performance; (f) a breach of any material provision of the Corporation’s Code of
Business Conduct and Ethics or other policies and procedures; (g)

  
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use of alcohol or drugs to the extent such use adversely affects the Executive’s ability to perform his duties or adversely affects the business reputation of the Executive or the
Corporation; (h) use of illegal drugs; or (i) failure or refusal to substantially perform Executive’s duties and responsibilities to the Corporation as reasonably determined from time to time by the CEO or the CEO’s designee.

 For any termination pursuant to subsections (e), (f) or (i) above, the Corporation shall first give written notice of the breach to
the Executive, and if the breach is susceptible to a cure, the Corporation shall give the Executive a reasonable opportunity to promptly (within 30 days) cure the breach. 
 6.2 In the event of the death or Disability of the Executive, the Corporation shall be entitled to terminate this Agreement. Upon such termination, the Corporation shall pay to the Executive, or in
the event termination is due to death, to his legal personal representative, that portion of the Executive’s Base Salary owed up to and including the date of termination. This payment will be made within thirty (30) days following
termination of employment. Following such payment, the Corporation shall have no further obligation to the Executive or his heirs and beneficiaries, under this Agreement. For the purposes of this Agreement, Disability shall be defined as the
inability of the Executive to effectively perform his duties due to physical or mental illness or injury, in the sole judgment of the Corporation, for a total of ninety (90) days out of any one hundred eighty (180) day period. Eligibility
for any benefits which may be available to the Executive or his survivors through any employee plans or benefit programs of the Corporation due to death or disability will be determined in accordance with the terms of such plans or programs.

 6.3 If the Corporation terminates the Executive’s employment for any reason other than “just cause”, death, or
disability, the Corporation shall provide Executive with the following Separation Benefits: 
  

	 	(a)	A one-time, Severance Payment equivalent to nine (9) months of current Base Salary. If, however, the Executive is involuntarily terminated within twelve
(12) months of a “Change in Control,” the Severance Payment shall be equivalent to twelve (12) months of current Base Salary. This Severance Payment will be made as a part of the Corporation’s standard payroll over the
applicable nine (9) or twelve (12) month period and shall be subject to standard payroll deductions and all other legal requirements. The Severance Payment shall commence on the first pay period after the sixtieth (60th) day following
Executive’s date of termination. 

  

	 	(b)	Payment of nine (9) months of COBRA premiums or, in the event of an involuntary termination within twelve (12) months of a Change in Control only, twelve
(12) months of COBRA premiums for medical insurance for Executive and/or his dependents if, and only if, Executive timely elects coverage for COBRA continuation. 

  
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	 	(c)	Payment of outplacement services in an amount not to exceed twenty-five thousand dollars ($25,000.00). 

 

	 	(d)	Executive agrees that in order to receive the Separation Benefits, Executive must execute a separation agreement and general waiver and release of claims
(“Release”) in a form satisfactory to the Corporation and he must return to the Corporation any property belonging to the Corporation which is in the Executive’s possession or under his control. If Executive fails to return the
Release to Corporation in sufficient time so that it becomes irrevocable within sixty (60) days after the date of termination, Executive shall forfeit his right to the Separation Benefits. Executive further agrees that in the event he violates
Article VII, the Corporation may terminate the Separation Benefits and Executive will repay any Separation Benefits he has received and any COBRA premiums paid by Corporation. 

 

	 	(e)	For purpose of this Article 6.3, the term “Change in Control” means: (i) any one person, or more than one person acting as a group, acquires ownership of
stock of the Corporation that, together with stock held by such person or group, constitutes more than fifty percent (50%) of the total fair market value or total voting power of the stock of the Corporation; (ii) any one person, or more
than one person acting as a group, acquires (or has acquired during any twelve (12) month period) ownership of stock of the Corporation possessing thirty percent (30%) or more of the total voting power of the stock of the Corporation;
(iii) a majority of the members of the Board of Directors is replaced during any twelve (12) month period by directors whose appointment is not endorsed by a majority of the members of the Board of Directors before the date of appointment
or election; or (iv) any one person, or more than one person acting as a group, acquires (or has acquired during any twelve (12) month period) assets from the Corporation that have a total gross fair market value equal to or more than
forty percent (40%) of the total gross fair market value of all of the assets of the Corporation immediately before such acquisition or acquisitions. 

  

	 	(f)	This Section 6.3 is intended to satisfy the requirements of the exemption from the application of Code Section 409A for separation pay plans under Treasury
Regulation Section 1.409A-1(b)(9). To the extent the aggregate payments due hereunder do not satisfy such exception, any excess payments shall be subject to the provisions of Article X. 

6.4 Unless otherwise consented to by the Corporation in writing, the Executive shall be entitled, upon thirty (30) days written notice to the
Corporation, to terminate this Agreement and his employment with the Corporation for any reason or for no reason, and in the event of such termination the Corporation shall only be required to pay the Executive, on a pro-rata basis, his Base Salary
which has accrued up to the date of termination. 

  
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 6.5 Upon termination of this Agreement for whatever reason, the Executive shall immediately
deliver to the Corporation all property of the Corporation which the Executive has in his possession or under his control. 

ARTICLE VII 

CONFIDENTIALITY AND COVENANT-NOT-TO-COMPETE 
 7.1 The Executive will execute the confidentiality agreement(s) and any such other agreements as are normally required to be executed by other Corporation salaried employees. During the period of
his employment and thereafter, the Executive will abide by the terms of the said agreements and keep confidential all confidential information pertaining to the Corporation which the Executive learned while employed by the Corporation, as such
confidential information is defined in the applicable confidentiality agreement(s). The promises, rights and obligations stated in Article VII shall survive the termination of Executive’s employment or this Agreement. 

7.2 The Executive shall not, directly or indirectly, within the territory comprising the United States and Canada, during his employment and for a
period of eighteen (18) months following the date of termination of his employment for whatever reason, either individually or in partnership or jointly or in conjunction with any person or persons, firm, association, joint venture, syndicate,
company or corporation as principal, agent, shareholder, employee, or consultant, engage in any of the same business endeavors engaged in by Corporation and any of its subsidiaries, or: 

 

	 	(a)	induce or attempt to influence or induce any of the employees of the Corporation (including its subsidiaries) to leave their employment; 

 

	 	(b)	hire, employ or utilize the services of any employee of the Corporation (including its subsidiaries); or 

 

	 	(c)	contact any Corporation customer (or prospective customer that Corporation is actively soliciting) for the purposes of: (i) inducing them to terminate their
business relationship with Corporation, (ii) discouraging them from doing business with Corporation, or (iii) offering products or services that are similar to or competitive with those of Corporation. “Contact” with any customer
includes responding to contact initiated by the customer. 

 7.3 It is agreed between the parties that the terms of this
Article are reasonable and that the Executive has received adequate consideration for the covenants and obligations undertaken by him, as contained herein. Executive further agrees that this Article is reasonably necessary for the protection of the
Corporation’s confidential information as defined in the applicable confidentiality agreement(s). The Executive further acknowledges that a breach or threatened breach by the Executive of the provisions of this Article may result in the
Corporation suffering irreparable harm which cannot be calculated or fully or adequately compensated by recovery of damages alone. Accordingly, the Executive agrees that the Corporation shall be entitled to interim or permanent injunctive relief
without 

  
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having to prove damages or post a bond or other security, specific performance and other equitable remedies, in addition to any other relief to which the Corporation may become entitled, in the
event of any such breach. Additionally, if Executive violates this Article, in addition to all other remedies available to the Corporation at law, in equity, and under contract, Executive agrees that he is obligated to pay all the Corporation’s
costs of enforcement of this Article, including attorneys’ fees and expenses. 
 ARTICLE VIII 

COOPERATION 

8.1 Executive agrees that after the termination of his employment, Executive may have to cooperate with Corporation with respect to matters of
which Executive may have knowledge due to Executive’s employment, including but not limited to any transition of Executive’s work responsibilities and any defense of any claims, causes of action, or charges brought against Corporation.
Executive agrees to cooperate fully with Corporation, including talking to and/or meeting with Corporation representatives, employees, agents and attorneys and providing, if necessary, testimony in any forum. Corporation in turn agrees to provide
reasonable notice to Executive should Executive’s cooperation in any matter be required. To the extent Corporation requires assistance and cooperation after Executive has received his last Separation Payment, Corporation agrees to reasonably
compensate Executive for his time; provided, however, Corporation shall not have to compensate Executive, if Corporation terminated him with just cause, or for his assistance with litigation, including his testimony in any forum. Corporation will
make all reasonable efforts to insure that such assistance and cooperation will not materially interfere with Executive’s employment and business responsibilities. Executive agrees that any failure to provide such cooperation as may be required
shall be a breach of a material term of this Agreement. 
 8.2 Executive shall be entitled to reimbursement of any reasonable
out-of-pocket expenses for travel, lodging, meals and other transportation incurred by him in relation to any cooperation supplied by Executive as described in this Section 8, subject to the Corporation’s regular business expense policies
and procedures. 
 ARTICLE IX 
 NOTICE 
 9.1 Any notice required to be given hereunder shall be in writing
and may be delivered personally or sent by facsimile transmission or other means of recorded electronic communications or sent by registered mail to the parties hereto at the following addresses: 

  
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 To the Corporation: 

Sparton Corporation 
 425 N. Martingale Road 
 Suite 2050 

Schaumburg, IL 60173 
  

	 	Attention:	Larry Brand 

	 	    	Vice President, Human Resources 

 To the Executive: 
 Mark Schlei 

1836 Baybrook Court 
 Naperville, IL 60564 
 Any notice given shall be deemed to have been given
and received on the business day on which it was so delivered, and if not a business day, then on the business day next following the day of delivery, and, if sent by electronic communications or facsimile shall be deemed to have been received on
the next business day following the date of transmission and if mailed, shall be deemed to have been given and received on the fifth day following the day on which it was so mailed. 
 9.2 Either party may change their address for notice in the aforesaid manner. 
 ARTICLE X 
 CODE SECTION 409A 

10.1 To the extent a payment hereunder is, or shall become, subject to the application of Code Section 409A, the following shall apply:

  

	 	(a)	The Corporation may delay payment hereunder only upon such events and conditions as the IRS may permit in generally applicable published regulatory or other guidance
under Code Section 409A, including, without limitation, payments that the Corporation reasonably anticipates will be subject to the application of Code Section 162(m), or will violate Federal securities laws or other applicable law;
provided that any such delayed payment will be made at the earliest date at which the Corporation reasonably anticipates that the making of the payment would not cause such a violation; 

  
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	 	(b)	The time or schedule of payment hereunder may be accelerated only upon such events and conditions as the IRS may permit in generally applicable published regulatory or
other guidance under Code Section 409A, including, without limitation, payment to a person other than the Executive to the extent necessary to fulfill the terms of a domestic relations order (as defined in Code Section 414(p)(1)(B)) or
payment of the amount required to be included in income for the Executive as a result of failure of this Agreement at any time to meet the requirements of Code Section 409A with respect to the Executive; 

 

	 	(c)	 If, as of the date Executive’s employment terminates, (1) any stock of the Corporation is publicly traded on an established securities market
or otherwise; and (2) a payment is payable under this Agreement due to a termination of employment which is considered to be a “separation from service” for purposes of the rules under Treasury
Regulation Section 1.409A-3(i)(2) (payments to specified employees upon a separation from service); and (3) the Executive is determined to be a “specified employee” (as determined under Treasury Regulation
Section 1.409A-1(i)), then the payment shall be delayed until a date that is six (6) months after the date Executive’s employment terminates to the extent necessary to comply with the requirements of Code Section 409A and related
Treasury Regulations; provided, however, that the payments to which the Executive would have been entitled during such six (6) month period, but for this Section 10.1(c), shall be accumulated and paid to the Executive on the first
(1st) day of the seventh (7th) month following the date Executive’s employment
terminates; and 

  

	 	(d)	This Agreement is intended to comply with the requirements of Code Section 409A and the Treasury Regulations and other guidance issued thereunder, as in effect
from time to time. To the extent a provision of this Agreement is contrary to or fails to address the requirements of Code Section 409A and related Treasury Regulations, this Agreement shall be construed and administered as necessary to comply
with such requirements to the extent allowed under applicable Treasury Regulations until this Agreement is appropriately amended to comply with such requirements. 

 ARTICLE XI 
 DISPUTES 

11.1 In any action or proceeding relating to this Agreement or otherwise arising out of or in connection with the Executive’s employment by
the Corporation, the parties agree that they shall be resolved by a bench trial and not a jury trial, and the parties agree that no damages other than compensatory damages shall be sought or claimed by either party and each party waives any right to
a jury trial and any claim, right or entitlement to punitive, exemplary, statutory or consequential damages, or any other damages. 

  
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 ARTICLE XII 

GENERAL 
 12.1
Time shall be of the essence in the performance of this Agreement. 
 12.2 This Agreement constitutes the entire agreement between
the parties hereto with respect to the matters contained herein and supersedes and replaces any previous agreements, contracts, oral understandings or discussions. This Agreement may not be amended or modified in any respect except by written
instrument signed by the parties hereto. 
 12.3 This Agreement shall be construed and enforced in accordance with the laws of the State
of Illinois, without regard to choice of law or conflicts of laws principles, and the parties hereby irrevocably consent to the jurisdiction of the Courts of the County of Cook County, Illinois, or for those matters which would be properly brought
in federal court, to the jurisdiction of the U.S. District Court for the Northern District of Illinois. 
 12.4 This language of this
Agreement reflects the mutual intent of the parties and shall not be strictly construed against either party; therefore no rule of strict construction shall apply in construing the terms of this Agreement. 

12.5 This Agreement shall be for the benefit of and shall be binding upon Corporation, its successors and assigns and, at the discretion of the
Corporation, upon any person, firm or corporation with which Corporation may be merged or consolidated or which may acquire all or substantially all of Corporation’s assets through sale, lease, liquidation or otherwise. The rights and benefits
of Executive are personal to him and no such rights or benefits shall be subject to assignment or transfer by Executive. 
 12.6 This
Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective heirs, legal personal representatives, successors and permitted assigns. 
 12.7 If for any reason, any provision or part of this Agreement shall be held to be invalid, illegal or unenforceable, the validity, legality or enforceability of the remaining provisions or part
provisions of this Agreement shall not in any way be affected or impaired thereby. 
 12.8 The waiver by either party of any breach of
the provisions of this Agreement shall not operate or be construed as a waiver by that party of any other breach of the same or any other provision of this Agreement. 
 12.9 Except as specifically altered in this Agreement, nothing in this Agreement shall detract from, alter, modify or amend any obligations or duties owed by the Executive to the Corporation,
pursuant to any statute, regulation, or at common law or equity. 

  
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 12.10 This Agreement may be executed in any number of counter-parts, all of which when taken
together, shall constitute one original Agreement.  
 IN WITNESS WHEREOF the parties hereto acknowledge and agree
that they have read and understand the terms of this Agreement, and that they have executed this Agreement of their own free act, on the dates set forth below, to be effective as of the Effective Date set forth herein. 

 

							
		 		 	SPARTON CORPORATION:
				
		 		 	By:	 	
			
	Date: 11/6/2012	 		 	/s/ Larry Brand
		 		 	Larry Brand
		 		 	Vice President, Human Resources
			
		 		 	EXECUTIVE:
			
	Date: 11/6/2012	 		 	/s/ Mark Schlei
		 		 	Mark Schlei

  
 12Amended and Restated Warrant issued to Square 1 Bank

 Exhibit 4.1 
 THIS WARRANT AND THE SHARES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH
APPLICABLE LAW. 
 AMENDED AND RESTATED 
 WARRANT TO PURCHASE STOCK 
  

							
		 	Corporation:	  	Celator Pharmaceuticals, Inc.	  	
		 	Number of Shares:	  	17,267	  	
		 	Class of Stock:	  	Common Stock	  	
		 	Initial Exercise Price:	  	$5.2123 per share	  	
		 	Original Issue Date:	  	June 15, 2012	  	
		 	Amended and Restated:	  	October 19, 2012	  	
		 	Expiration Date:	  	June 15, 2019	  	

 THIS AMENDED AND RESTATED
WARRANT CERTIFIES THAT, for good and valuable consideration, the receipt of which is hereby acknowledged, SQUARE 1 BANK or its assignee
(“Holder”) is entitled to purchase the number of fully paid and nonassessable shares of the Common Stock (the “Shares”) of the corporation (the “Company”) at the initial
exercise price per Share (the “Warrant Price”) all as set forth above and as adjusted pursuant to Article 2 of this Warrant, subject to the provisions and upon the terms and conditions set forth in this Warrant. This Amended
and Restated Warrant amends, restates and supersedes that certain Warrant to Purchase Stock issued by the Company to Holder on June 15, 2012. 
 ARTICLE 1 
 EXERCISE 

1.1 Method of Exercise. Holder may exercise this Warrant by delivering this Warrant and a duly executed Notice of Exercise in
substantially the form attached as Appendix 1 to the Warrant to the principal office of the Company. Unless Holder is exercising the conversion right set forth in Section 1.2, Holder shall also deliver to the Company a check for the aggregate
Warrant Price for the Shares being purchased. 
 1.2 Conversion Right. In lieu of exercising this Warrant as specified in
Section 1.1, Holder may from time to time convert this Warrant, in whole or in part, into a number of Shares determined by dividing (a) the aggregate fair market value of the Shares or other securities otherwise issuable upon exercise of
this Warrant minus the aggregate Warrant Price of such Shares by (b) the fair market value of one Share. The fair market value of the Shares shall be determined pursuant to Section 1.3. 

1.3 Fair Market Value. If the Shares are traded regularly in a public market, the fair market value of the Shares shall be the
closing price of the Shares reported for the business day immediately before Holder delivers its Notice of Exercise to the Company. If the Shares are not regularly traded in a public market, the Board of Directors of the Company shall determine fair
market value in its reasonable good faith judgment. 

 1.4 Delivery of Certificate and New Warrant. Promptly after Holder exercises or
converts this Warrant, the Company shall deliver to Holder certificates for the Shares acquired and, if this Warrant has not been fully exercised or converted and has not expired, a new Warrant representing the Shares not so acquired. 

1.5 Replacement of Warrant. On receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or
mutilation of this Warrant and, in the case of loss, theft or destruction, on delivery of an indemnity agreement reasonably satisfactory in form and amount to the Company or, in the case of mutilation, on surrender and cancellation of this Warrant,
the Company at its expense shall execute and deliver, in lieu of this Warrant, a new warrant of like tenor. 
 1.6
Acquisition of the Company. 
 1.6.1 Definitions. For the purpose of this Warrant, “Acquisition” means
(a) any sale, license, or other disposition of all or substantially all of the assets (including intellectual property) of the Company, or (b) any reorganization, consolidation, merger or sale of the voting securities of the Company or any
other transaction where the holders of the Company’s securities before the transaction beneficially own less than 50% of the outstanding voting securities of the surviving entity after the transaction. 

1.6.2 Assumption of Warrant. If upon the closing of any Acquisition the successor entity assumes the obligations of this Warrant,
then this Warrant shall be exercisable for the same securities, cash, and property as would be paid, issued or exchanged (as applicable) for the Shares issuable upon exercise of the unexercised portion of this Warrant as if such Shares were
outstanding on the record date for the Acquisition and subsequent closing. The Warrant Price shall be adjusted accordingly. The Company shall use reasonable efforts to cause the surviving corporation to assume the obligations of this Warrant.

 1.6.3 Nonassumption. If upon the closing of any Acquisition the successor entity does not assume the obligations of
this Warrant and Holder has not otherwise exercised this Warrant in full, then this Warrant shall automatically be converted pursuant to Section 1.2 and thereafter Holder shall participate in the Acquisition on the same terms as other holders
of the same class of securities of the Company. 
 ARTICLE 2 

ADJUSTMENTS TO THE SHARES 
 2.1 Stock Dividends, Splits, Etc. If the Company declares or pays a dividend on Common Stock payable in Common Stock, or other securities, or subdivides the outstanding Common Stock into a greater
amount of Common Stock, then upon exercise of this Warrant, for each Share acquired, Holder shall receive, without cost to Holder, the total number and kind of securities to which Holder would have been entitled had Holder owned the Shares of record
as of the date the dividend or subdivision occurred. 

  
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 2.2 Reclassification, Exchange or Substitution. Upon any reclassification, exchange,
substitution, or other event that results in a change of the number and/or class of the securities issuable upon exercise or conversion of this Warrant, Holder shall be entitled to receive, upon exercise or conversion of this Warrant, the number and
kind of securities and property that Holder would have received for the Shares if this Warrant had been exercised immediately before such reclassification, exchange, substitution, or other event. Such an event shall include any automatic conversion
of the outstanding or issuable securities of the Company of the same class or series as the Shares to common stock pursuant to the terms of the Company’s Certificate of Incorporation upon the vote of the requisite holders of the Common Stock or
upon the closing of a registered public offering of the Company’s common stock. The Company or its successor shall promptly issue to Holder a new warrant for such new securities or other property. The new warrant shall provide for adjustments
which shall be as nearly equivalent as may be practicable to the adjustments provided for in this Article 2 including, without limitation, adjustments to the Warrant Price and to the number of securities or property issuable upon exercise of the new
warrant. The provisions of this Section 2.2 shall similarly apply to successive reclassifications, exchanges, substitutions, or other events. 
 2.3 Adjustments for Combinations, Etc. If the outstanding shares of Common Stock are combined or consolidated, by reclassification or otherwise, into a lesser number of shares of Common Stock, the
Warrant Price shall be proportionately increased. If the outstanding shares of Common Stock are combined or consolidated, by reclassification or otherwise, into a greater number of shares of Common Stock, the Warrant Price shall be proportionately
decreased. 
 2.4 Adjustment for Diluting Issuances. For the sake of clarity, in the event of the issuance by the Company
after the Issue Date of securities at a price per share less than the Warrant Price, the number of shares of common stock issuable upon conversion of the Shares shall be adjusted as provided in the Company’s Certificate of Incorporation.

 2.5 Certificate as to Adjustments. Upon each adjustment of the Warrant Price, the Company at its expense shall
promptly compute such adjustment, and furnish Holder with a certificate of its Chief Financial Officer setting forth such adjustment and the facts upon which such adjustment is based. The Company shall, upon written request, furnish Holder a
certificate setting forth the Warrant Price in effect upon the date of such certificate and the series of adjustments leading to such Warrant Price. 
 2.6 Fractional Shares. No fractional Shares shall be issuable upon exercise or conversion of the Warrant and the Number of Shares to be issued shall be rounded down to the nearest whole Share. If a
fractional share interest arises upon any exercise or conversion of the Warrant, the Company shall eliminate such fractional share interest by paying Holder that amount as is computed by multiplying the fractional interest by the fair market value
of a full Share. 

  
 3 

 ARTICLE 3 
 REPRESENTATIONS AND COVENANTS OF THE COMPANY 
 3.1 Representations and
Warranties. The Company hereby represents and warrants to the Holder as follows: 
 (a) The initial Warrant Price
referenced on the first page of this Warrant is the purchase price paid by the Company’s investors in the Company’s most recent equity issuance. 
 (b) All Shares which may be issued upon the exercise of the purchase right represented by this Warrant shall, upon issuance, be duly authorized, validly issued, fully paid and nonassessable, and
free of any liens and encumbrances except for restrictions on transfer provided for herein or under applicable federal and state securities laws. 
 (c) The Company’s capitalization table attached to this Warrant is true and complete as of the Issue Date. 
 3.2 Notice of Certain Events. The Company shall provide Holder with not less than 10 days prior written notice, including a description of the material facts surrounding, any of the following
events: (a) declaration of any dividend or distribution upon its common stock, whether in cash, property, stock, or other securities and whether or not a regular cash dividend; (b) offering for subscription pro rata to the holders of any
class or series of its stock any additional shares of stock of any class or series or other rights; (c) effecting any reclassification or recapitalization of common stock; or (d) the merger or consolidation of the Company with or into any
other corporation, or sale, lease, license, or conveyance of all or substantially all of its assets, or liquidation, dissolution or winding up. 
 3.3 Information Rights. So long as the Holder holds this Warrant and/or any of the Shares, the Company shall deliver to the Holder (a) promptly after mailing, copies of all communiques to the
stockholders of the Company, (b) within one hundred eighty (180) days after the end of each fiscal year of the Company, the annual audited financial statements of the Company certified by independent public accountants of recognized
standing and (c) within forty-five (45) days after the end of each of the first three quarters of each fiscal year, the Company’s quarterly, unaudited financial statements. Notwithstanding the above, the Company shall only be required
to deliver the financial statements set forth in subsections (b) and (c) above at such times as that certain Loan and Security Agreement entered into between Holder and the Company dated on or about June 15, 2012 shall no longer be in
full force and effect. 
 ARTICLE 4 
 MISCELLANEOUS 
 4.1 Term: Exercise Upon Expiration. This Warrant is
exercisable in whole or in part, at any time and from time to time on or before the Expiration Date set forth above; provided, however, that if the Company completes its initial public offering within the one year period immediately prior to the
Expiration Date, the Expiration Date shall automatically be extended until the first anniversary of the effective date of the consummation of the Company’s 

  
 4 

 
initial public offering. If this Warrant has not been exercised prior to the Expiration Date, this Warrant shall be deemed to have been automatically exercised on the Expiration Date by
“cashless” conversion pursuant to Section 1.2. 
 4.2 Legends. This Warrant and the Shares issuable upon
exercise or exercise of this Warrant from time to time shall be imprinted with a legend in substantially the following form: 
 THE SHARES
REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED, OR UNDER THE SECURITIES LAW OF ANY FOREIGN JURISDICTION OR ANY STATE WITHIN THE UNITED STATES. SUCH SHARES MAY NOT BE SOLD, TRANSFERRED,
ASSIGNED, PLEDGED, OR HYPOTHECATED ABSENT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR COMPLIANCE WITH RULE 144 PROMULGATED UNDER SUCH ACT, OR SUCH FOREIGN OR STATE SECURITIES LAW OR UNLESS THE CORPORATION HAS RECEIVED AN OPINION OF COUNSEL,
SATISFACTORY TO THE CORPORATION AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED. 
 4.3 Compliance with Securities
Laws on Transfer. This Warrant and the Shares issuable upon exercise of this Warrant may not be transferred or assigned in whole or in part without compliance with applicable federal and state securities laws by the transferor and the
transferee. The Company shall not require Holder to provide an opinion of counsel if the transfer is to an affiliate of Holder or if there is no material question as to the availability of current information as referenced in Rule 144(c), Holder
represents that it has complied with Rule 144 (d) and (e) in reasonable detail, the selling broker represents that it has complied with Rule 144(f), and the Company is provided with a copy of Holder’s notice of proposed sale under
Rule 144. 
 4.4 Transfer Procedure. Subject to the provisions of Section 4.3, Holder may transfer all or part of
this Warrant or the Shares issuable upon exercise of this Warrant (or the securities issuable, directly or indirectly, upon conversion of the Shares, if any) by giving the Company notice of the portion of the warrant being transferred setting forth
the name, address and taxpayer identification number of the transferee and surrendering this Warrant to the Company for reissuance to the transferee(s) (and Holder, if applicable). No surrender or reissuance shall be required if the transfer is to
an affiliate of Holder. 
 4.5 Notices. All notices and other communications from the Company to Holder, or vice versa,
shall be deemed delivered and effective when given personally or mailed by first-class registered or certified mail, postage prepaid, at such address as may have been furnished to the Company or Holder, as the case may be, in writing by the Company
or such Holder from time to time. All notices to the Holder shall be addressed as follows: 
 Square 1 Bank 

Attn: Warrant Administrator 
 406 Blackwell Street, Suite 240 
 Crowe Building 

Durham, NC 27701 

  
 5 

 4.6 Amendments. This Warrant and any term of this Warrant may be changed, waived,
discharged or terminated only by an instrument in writing signed by the party against which enforcement of such change, waiver, discharge or termination is sought. 
 4.7 Attorneys’ Fees. In the event of any dispute between the parties concerning the terms and provisions of this Warrant, the party prevailing in such dispute shall be entitled to collect from
the other party all costs incurred in such dispute, including reasonable attorneys’ fees. 
 4.8 Governing Law. This
Warrant shall be governed by and construed in accordance with the laws of the State of Delaware, without giving effect to its principles regarding conflicts of law. 
 [Signature Page Follows] 

  
 6 

 IN WITNESS WHEREOF, the undersigned has executed this Warrant to Purchase Stock as of the date set forth
above. 
  

			
	CELATOR PHARMACEUTICALS, INC.
		
	By:	 	 /s/ David S. Wood

	Name:	 	David S. Wood
	Title:	 	Head of Finance

 [Signature Page to Warrant to Purchase Stock] 

  
 7 

 APPENDIX 1 

NOTICE OF EXERCISE 
 1. The undersigned hereby elects to purchase                 shares of the common stock of CELATOR
PHARMACEUTICALS, INC. pursuant to the terms of the attached warrant, and tenders herewith payment of the purchase price of such shares in full. 

1. The undersigned hereby elects to convert the attached warrant into shares in the manner specified in the warrant. This
conversion is exercised with respect to                 of the shares covered by the warrant. 
 [Strike paragraph that does not apply.] 
 2. Please issue a
certificate or certificates representing said shares in the name of the undersigned or in such other name as is specified below: 
 Square 1 Bank 
 Attn: Warrant Administrator 

406 Blackwell Street, Suite 240 
 Fowler Building 
 Durham, NC 27701 

3. The undersigned represents it is acquiring the shares solely for its own account and not as a nominee for any other party and
not with a view toward the resale or distribution thereof except in compliance with applicable securities laws. 
  

	
	 SQUARE 1 BANK or Registered Assignee

	
	  

	 (Signature)

	
	  

	 (Date)

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