EMPLOYMENT AGREEMENT
THIS
EMPLOYMENT AGREEMENT (the “Agreement”), dated as of 21 September, 2007, 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;
| 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, 21 September, 2007,
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)
21 September, 2007 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 our Executive Chairman and Chief Executive
Officer (CEO) of the Company and shall have the duties, responsibilities and
authority in respect of his CEO function 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 21 September, 2007 through and including the termination of this
Agreement as provided herein, the Executive’s base salary compensation will be
no less then $386,400 (including superannuation) per year (the “Base Salary”)
payable in accordance with the Company’s regular payroll practices (eg, timing
of payments and standard employee deductions, such as income and employment
tax
withholdings). Made up as $315,000 (including superannuation) for Executive
Chairman and $71,400 (including superannuation) for additional CEO duties to
be
increased by CPI annually, commencing 1 February 2008. The foregoing salary
may
be increased, but not decreased, at the discretion of the Board of Directors.
|
(b)
|
Bonus
Compensation
|
The
Company will pay the Executive the following bonuses:
|
·
|
Bonus
of $50,000 following a capital raising of at least A$7m (before costs)
prior to 30 September 2007.
|
|
·
|
Bonus
of $25,000 following a further capital raising of at least A$12m
(before
costs) anytime in the 2008 financial year.
|
|
·
|
Bonus
of $25,000 for attaining a share price above $0.60 for at least four
consecutive trading days by 30 June 2008
|
|
·
|
Bonus
of $50,000 for implementation of the following:
|
|
o
|
Completion
of clinical trial recruitment by 30 September 2007 - $10K bonus
|
|
o
|
Completion
of signed Statistical Analysis Report by 29 February 2008 - $10K
bonus
|
|
o
|
Regular
meetings (minimum twice yearly) of the full Integrated Advisory Board
-
$6K bonus
|
|
o
|
Review
and provide written proposal to the board of Prana’s Intellectual Property
Portfolio to determine other value add opportunities for license,
merger
and acquisition or divestment by 31 December 2007 - $14K bonus
|
|
o
|
Develop
Prana staff retention strategy and action plan by 31 October 2007
and
implement by 31 December 2007 - $10K bonus
|
Page
1 of 7
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)
|
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 the 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.
|
|
(d)
|
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 or all reasonable business expenses
actually incurred in the performance of his duties for the Company.
|
(e)
|
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 the 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.
|
(f)
|
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.
|
(g)
|
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. |
Terminations
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.
|
Page
2 of 7
|
(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 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
Executive.
|
|
(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 $1,000,000
provided the Company has sufficient capital requirements to fulfil
this
clause,
|
| (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 the
| (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) |
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.
|
| (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-rate Bonus Compensation and unremibursed 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 then
50
kilometers 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), iii)
or iv) of
Section 5(i) where notice is given by the Executive in accordance
with
sub-paragraph (BB) of Section 5(i).
|
Page
3 of 7
| (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 therefore, 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.
| (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 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 the parties who
did not
control the Composition of the Board at the date 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).
Page
4 of 7
| 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.
| (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
then 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, complications, studies or
other documents prepared by the Executive or for the Executives’ 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 he 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,
investigation or other information or similar character. For Executives’
obligations under the 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 confidentially 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.
In
the event of any such submission to mediation:
| 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
|
Page
5 of 7
| (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 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 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.
IN
WITNESS WHEREOF, this Agreement has been executed as of the date of year first
above written.
PRANA
BIOTECHNOLOGY LIMITED
Xxxxxx
Xxxxxx
Remuneration
Committee
THE
EXECUTIVE:
Xxxxxxxx
Xxxxxxx
Page
6 of 7
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:
|
·
|
Develop
and implement a business plan approved by the Board of Directors
to
provide a clear and rational basis for the ongoing prioritization
of the
Company’s activities and resource allocation, updated as
required.
|
|
·
|
Develop
and expand the management team of the
Company.
|
|
·
|
Demonstrate
strong commerciality in dealing with Company’s
assets.
|
|
·
|
Direct
and oversee relationships with major pharmaceutical companies, government
regulatory agencies, investors and
others.
|
|
·
|
Work
to continually improve the capitalization and ensure the ongoing
funding
of the Company.
|
|
·
|
Comply
with the current or future Company
policies.
|
Page
7 of 7
