EMPLOYMENT AGREEMENT
Exhibit
4.25
THIS
EMPLOYMENT AGREEMENT (the “Agreement”), dated as of 15 June, 2005, between Prana
Biotechnology Limited, an Australian corporation (the “Company”) with its
principal offices at Xxxxx 0, 000 Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx, Xxxxxxxxx,
and Xxxxxxxx Xxxxxxx (the “Executive”), residing at 00 Xxxxxxxxxxx Xxxxxx Xxxxx
Xxxxxxxxx 0000, Xxxxxxxx, Xxxxxxxxx.
WHEREAS,
the Company desires to employ the Executive, and the Executive desires to
be
employed by the Company, upon the terms and conditions set forth
herein;
NOW,
THEREFORE, in consideration of the mutual covenants contained herein and
other
good and valuable consideration, the receipt and sufficiency of which are
hereby
acknowledged, the parties hereto agree as follows:
1. Employment.
The
Company hereby employs the Executive, and the Executive agrees to accept
such
employment, upon the terms and conditions herein set forth.
2. Employment
Period.
The
term of employment hereunder shall commence on the date hereof, 15 June,
2005,
and continue until termination as provided herein (the “Employment Period”). It
is acknowledged that the Executive has previously provided services to the
Company, this Agreement applies only to his employment as from (and including)
15 June 2005, and prior accrued entitlements of the Executive are not adversely
affected by this Agreement.
3. Position
and Duties.
The
Executive hereby agrees to serve as Chief Executive Officer (CEO) of the
Company
and shall have the duties, responsibilities and authority as more fully set
forth on Attachment A attached hereto. In such capacity the Executive shall
report to the Board of Directors of the Company and shall serve on the Board
of
Directors. As an existing Director of the Company, termination of the CEO
role
will not terminate the Executive’s directorship on the Board. The Executive
shall devote his best efforts and attention to the performance of services
to
the Company in accordance with the terms hereof and as may reasonably be
requested by the Company.
4. Compensation
and Other Terms of Employment.
(a) Base
Compensation.
In
consideration of the performance of his duties for the Company, for the period
beginning 15 June, 2005 through and including the termination of this Agreement
as provided herein, the Executive's base compensation will be no less than
$367,000 per year (the “Base Salary”) payable in accordance with the Company’s
regular payroll practices (e.g.,
timing
of payments and standard employee deductions, such as income and employment
tax
withholdings). The foregoing salary may be increased, but not decreased,
at the
discretion of the Board of Directors.
(b) Bonus
Compensation.
The
Company will pay Executive a bonus in the amount of $100,000 for achievement
of
the satisfactory completion of a successful Phase One trial within the timeframe
specified by the Company Strategic Plan and a further $100,000 bonus for
the
satisfactory completion of a proof of concept study such as a Phase Two (A)
trial on efficacy and dosage. Upon termination of this Agreement pursuant
to the
Executive's death or disability pursuant to Section 5(e) below, the Company
shall pay a pro-rata bonus pursuant to Section 5(e).
(c)
Within
thirty days of the earlier of the next Annual General Meeting (timing yet
to be
determined but expected to be between September and November 2005) or the
next
General Meeting, and subject to shareholder approval of an appropriate
resolution, the Company shall consider the grant to the Executive of zepo
options for a number of ordinary shares determined by the Remuneration
Committee
based upon the Executive’s performance. Such options will vest over a period of
four years, with 25% vesting at the end of each year from the beginning
of the
four-year period. The options will expire at the end of eight years from
the
initial date of the grant. No tranche of these options may be exercised
until
and unless the price of the Company’s ordinary shares has achieved and
maintained a minimum value of $1.00 for five consecutive trading days.
The
Executive will not be entitled to sell any of the options so exercised
unless he
has the consent of the Board.
(d) It
is
intended that the Executive should have no disincentive to his spending
additional days each year in the USA. Accordingly, the Base Salary and bonus
will be adjusted each year (by agreement between the Executive and the Board
of
Directors) to compensate the Executive for differences in Australian and
United
States tax rates in the event that this difference has penalized the Executive
for spending significant time in the USA.
(e) Business
Expenses.
Upon
presentation of vouchers and similar receipts, the Executive shall be entitled
to receive reimbursement in accordance with the policies and procedures of
the
Company maintained from time to time for all reasonable business expenses
actually incurred in the performance of his duties for the Company.
(f) Vacation.
The
Executive shall be entitled to twenty (20) days of vacation during each calendar
year of the Employment Period. Any vacation days that the Executive does
not use
in a calendar year will automatically be carried over for use in the following
year to a maximum carry of two years. Any vacation days that the Executive
has
not used at the termination of the Employment Period will be paid to the
Executive at his Base Salary rate in effect at the time of termination.
(g) Benefits.
The
Executive shall be entitled to participate in such employment benefits,
including but not limited to a retirement plan, health, dental, life insurance,
and short and long term disability plans as are established by the Company
and
as in effect from time to time applicable to executives of the
Company.
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(h) Review.
The
Remuneration Committee of the Company (or if there is no Remuneration Committee
for the time being, the Board or a committee of the Board) shall not less
than
once each year consider and if thought fit recommend to the Board (or, in
the
case of the Board, propose) changes to the salary to be received by the
Executive pursuant to this Agreement or as applying after an earlier review
or
amendment of terms. The purpose of the review and recommended or proposed
changes shall be to ensure that the salary of the Executive, when considered
together with all other benefits to which the Executive is or may become
entitled under this Agreement, is comparable with and maintains parity with
salaries representatives payable to executives in like circumstances when
benefits to which such executives may reasonably be expected to be or to
become
entitled are taken into account. Such review shall be carried out in accordance
with the corporate governance policies of the Company applicable at the time
(if
any). The Executive shall not be involved in any discussions or decision
concerning recommendations or proposals.
5. Termination
and Consequences.
(a) The
Executive’s Right to Terminate.
Notwithstanding any other provision of this Agreement to the contrary, the
Executive may terminate this Agreement: (i) at any time during the
Employment Period for Good Reason (as defined in Section 5(f) below), on
at
least thirty (30) days' prior written notice; or (ii) without Good
Reason
on at least ninety (90) days' prior written notice to the Company.
(b) The
Company's Right to Terminate.
Notwithstanding any other provision of this Agreement to the contrary, the
Company may terminate this Agreement: (i) at any time during the Employment
Period, with Cause (as defined in Section 5(g) below); or (ii) without Cause,
on
at least ninety (90) days’ prior written notice to the Executive but in any
event, not prior to 1 June, 2010.
(c) Consequences
of Termination Without Cause or for Good Reason.
If the
Company terminates this Agreement without Cause, or if the Executive terminates
this Agreement with Good Reason, the Company shall (i) pay the Executive
within ninety (90) days of the termination date such sum or sums as he would
have been entitled to receive had he continued to provide services under
this
Agreement until 1 June 2010, notwithstanding that those services will not
be
required to be provided; (ii) immediately pay the Executive all
unreimbursed business expenses and accrued, unused vacation days; and
(iii) accelerate the vesting of any unvested options to purchase ordinary
shares and permit Executive to exercise such options during the remainder
of the
exercise period for such options.
(d) Consequences
of Termination With Cause or Without Good Reason.
If the
Company terminates this Agreement with Cause or the Executive terminates
this
Agreement Without Good Reason, then (i) Executive's Base Salary shall
be
discontinued upon the termination of the Employment Period; (ii)
Bonus
Compensation shall be pro-rated only if termination with Cause occurs in
the
first year; and (iii) the Company shall pay the Executive all unreimbursed
business expenses and accrued, unused vacation days; and (iv) Executive
shall be permitted to exercise only unvested options to purchase shares that
pre-existed this contract.
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(e) Consequences
of Termination for Death or Disability.
If the
Executive dies during the term of this Agreement, then the Agreement shall
terminate, except that the Company shall pay to Executive's estate all accrued
Base Salary, pro-rata Bonus Compensation and unreimbursed business expenses
and
accrued, unused vacation days that the Executive would otherwise have been
entitled to receive. Executive's estate shall also be permitted to exercise
Executive's vested options for shares. If the Executive is unable to perform
his
functions because of Disability and the Agreement is terminated for that
reason,
the Executive shall be entitled to receive the same amount that the Company
would be obligated to pay if the Executive had died during the term of this
Agreement less the amounts of payment under any disability policy maintained
by
the Company.
(f) Definition
of Good Reason.
“Good
Reason” means (i) a material reduction of the Executive's duties and
responsibilities from those in effect immediately prior to the reduction
or
change, (ii) a requirement that the Executive relocate his primary office
more
than 50 kilometres from North Xxxxxxxxx, Xxxxxxxx, or (iii) material breach
by
the Company of any provision of this Agreement after receipt of ten (10)
days
written notice thereof from the Executive and failure by the Company to cure
the
breach within thirty (30) days thereafter, or (iv) the occurrence of an event
described in sub-paragraphs i), ii), ii) or iv) of Section 5(i) where notice
is
given by the Executive in accordance with sub-paragraph (BB) of Section 5(i).
(g) Definition
of Cause.
“Cause”
means the Executive's (i) conviction of a felony, (ii) commission
of
acts of fraud, misappropriation, embezzlement, or theft, or (iii) willful
or repeated failure to follow lawful specific directives of the Board of
Directors to act or refrain from acting, which directives are consistent
with
the Executive's position as Chief Executive Officer of the Company. Before
the
Company can terminate the Executive for Cause under clause (g)(iii) of this
Section 5(g), the Company must give the Executive written notice setting
forth
the Company’s dissatisfaction with the Executive and the reasons therefor, and
give the Executive thirty (30) days to cure the circumstances supporting
the for
Cause determination.
(h) Definition
of Disability.“Disability”
means the inability of the Executive to perform the Executive’s
duties of employment to the Company pursuant to the terms of this Agreement,
because of physical or mental disability where such disability shall have
existed for a period of more than sixty (60) consecutive days or an aggregate
of
ninety (90) days in any 365 day period. The existence of a Disability means
that
the Executive’s mental and/or physical condition substantially interferes with
the Executive’s performance of his substantive duties for the Company as
specified in this Agreement. The fact of whether or not a Disability exists
hereunder shall be determined by a professionally qualified medical expert
selected by the Company and the Executive.
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(i) Change
of Control.
Despite
anything to the contrary in this Agreement, in the event that:
i) there
is
an effective change of control of fifty percent (50%) of the issued capital
of
the Company;
ii) the
business, operations or capital of the Company is merged in or combined with
that of another entity or entities; or
iii) the
membership of the Board changes to the extent that at least 50% of the Board
did
not hold office at the date of this of this Agreement; or
iv) control
of the composition of the Board changes to the extent that control of the
composition of the Board is or can be exercised by parties who did not control
the composition of the Board at the date of this of this Agreement,
then,
without limiting the other circumstances in which Section 5(c) may apply,
Section 5(c) shall apply:
(AA)
if
the
Company subsequently terminates this Agreement without Cause (as herein
defined); and
(BB) if
the
Executive terminates this Agreement, which termination shall be deemed to
have
been termination with Good Reason (as herein defined) provided always that
the
Executive gives at least one (1) month's written notice to the Company within
a
period of six (6) months immediately following the occurrence of an event
described in sub-paragraphs i), ii), iii) or iv) of this Section
5(i).
(j) Non-disparagement.
In the
event that Executive terminates this Agreement with or without Good Reason,
or
that the Company terminates this Agreement with or without Cause, the Company
and the Executive agree that they will not disparage each other in any
way.
(k) Resignation
as a Director.
If the
Executive resigns as a Director he shall immediately resign (or be deemed
to
have resigned) as Chief Executive Officer (CEO) and to have terminated this
Agreement. The provisions of this Section 5 shall apply to such termination
of
this Agreement (that is, such termination or deemed termination of this
Agreement by the Executive shall either have been with Good Reason or not
with
Good Reason, as the case may be, as provided for above).
6. Records
and Confidential Data.
(a) Acknowledgement.
The
Executive acknowledges that in connection with the performance of his duties
during the term of his employment the Company will make available to the
Executive, or the Executive will have access to, certain Confidential
Information (as defined below) of the Company. The Executive acknowledges
and
agrees that any and all Confidential Information learned or obtained by the
Executive during the course of his employment by the Company or otherwise
whether developed by the Executive alone or in conjunction with others or
otherwise, shall be and is the property of the Company and its
affiliates.
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(b) Confidentiality
Obligations.
During
the term of his employment and thereafter Executive shall keep all Confidential
Information confidential and will not use such Confidential Information other
than in connection with the Executive’s discharge of his duties hereunder, and
will be safeguarded by the Executive from unauthorized disclosure. This covenant
is not intended to, and does not limit in any way Executive’s duties and
obligations to the Company under statutory and common law not to disclose
or
make personal use of the Confidential Information or trade secrets.
(c) Return
of Confidential Information.
Following the Executive’s termination of employment, as soon as possible after
the Company’s written request, the Executive will return to the Company all
written Confidential Information which has been provided to the Executive
and
the Executive will destroy all copies of any analyses, compilations, studies
or
other documents prepared by the Executive or for the Executive’s use containing
or reflecting any Confidential Information.
(d) Definition.
For the
purposes of this Agreement, “Confidential Information” shall mean all
confidential and proprietary information of the Company, and its affiliates,
including, without limitation, the Company’s scientific information, marketing
strategies, pricing policies or characteristics, customers and customer
information, product or product specifications, designs, software systems,
leasing costs, cost of equipment, customer lists, business or business
prospects, plans, proposals, codes, marketing studies, research, reports,
investigations, or other information of similar character. For purposes of
this
Agreement, the Confidential Information shall not include and the Executive’s
obligations under this Section 6 shall not extend to (i) information which
is
generally available to the public, (ii) information obtained by the Executive
from third persons,
other
than Executives of the Company, the Company and the Company’s affiliates, not
under agreement to maintain the confidentiality of the same and (iii)
information which is required to be disclosed by law or legal process and
(iv)
information known to Executive prior to commencement of his employment with
the
Company, as evidenced by written documentation.
7.
Arbitration.
(a)
Good
Faith Discussions.
The
parties shall meet and discuss in good faith any dispute between them arising
out of this Agreement.
(b)
Mediation.
If the
discussions referred to in the preceding Section 7(a) fail to resolve the
relevant dispute, either party may (by written notice to the other party)
require that the dispute be submitted for mediation by a single mediator
nominated by the President for the time being of the Victorian Law Institute
of
Victoria Society. In the event of any such submission to mediation:
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i) The
mediator shall be deemed to be not acting as an expert or as an
arbitrator;
ii) The
mediator shall determine the procedure and timetable for the mediation;
and
iii) The
cost
of the mediation shall be shared equally between the parties.
(c)
Legal
Proceedings.
Neither
party may issue any legal proceedings in respect of any such dispute unless
that
party has first taken all reasonable steps to comply with Sections 7(a) and
(b).
8. Miscellaneous
Provisions.
(a) Notices.
All
notices, offers or other communications required or permitted to be given
pursuant to this Agreement shall be in writing and shall be considered as
properly given or made (i) if delivered personally; (ii) after
the
expiration of thirty (30) days from the date upon which such notice was mailed
from within the United States or Australia by certified mail, return receipt
requested, postage prepaid; or (iii) upon receipt by prepaid telegram,
facsimile transmission or electronic mail transmission (with written
confirmation of receipt for each kind of transmission). All notices given
or
made pursuant hereto shall be so given or made to the Executive at the address
contained in the Company's personnel records and to the Company at its
headquarters, addressed to the attention of the Chair of the Board of
Directors.
(b) The
Executive’s Representations and Warranties.
The
Executive hereby represents and warrants that he is not a party to any
agreement, contract or understanding that would in any way restrict or prohibit
him from undertaking or performing any of his obligations under this Agreement.
(c) Amendments.
Except
as set forth in Section 4 above, this Agreement shall not be changed or amended
unless in writing and signed by both the Executive and the Company.
(d) Governing
Law.
This
Agreement shall be governed by and construed in accordance with the laws
of the
State
of Victoria applicable
to contracts executed in and to be performed entirely within that jurisdiction.
Each party irrevocably submits to the non-exclusive jurisdiction of courts
of
that state and the courts of appeal therefrom and waives any right to object
to
such jurisdiction on the basis of domicile or of being an inconvenient
forum.
(e) Counterparts.
This
Agreement may be executed in counterparts, each of which shall be an original,
but all of which shall constitute one and the same instrument.
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IN
WITNESS WHEREOF, this Agreement has been executed as of the date and year
first
above written.
| PRANA BIOTECHNOLOGY LIMITED | ||
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| By: | /s/ | |
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Name: |
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| Title: | ||
| THE EXECUTIVE: | ||
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Xxxxxxxx Xxxxxxx |
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ATTACHMENT
A
DESCRIPTION
OF DUTIES
The
Executive shall have the responsibilities and functions generally associated
with the position of Chief Executive Officer (CEO), including but not limited
to:
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Develop
and implement a business plan approved by the Board of Directors
to
provide a clear and rational basis for the ongoing prioritisation
of the
Company's activities and resource allocation, updated as
required.
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§
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Develop
and expand the management team of the
Company.
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§
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Demonstrate
strong commerciality in dealing with the Company's
assets.
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§
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Direct
and oversee relationships with major pharmaceutical companies,
government
regulatory agencies, investors and
others.
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§
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Work
to continually improve the capitalisation and ensure the ongoing
funding
of the Company.
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§
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Comply
with current or future Company
policies.
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