exv10w11



 







Exhibit 10.11











10 May 2004




Mr PJ Welburn

7 Eden Drive

Eatons Hill QLD 4037



Dear Peter,



Peplin Biotech Limited (the “Company”) is taking the opportunity to document your contract of
employment as at 10 May 2004. This brings into one current document your terms of appointment as
Director — Drug Development with the Company, consolidating and replacing all previous terms and
conditions of employment with the Company.



The conditions of your employment are as follows:





	1.	 	Appointment
	 
	 	 	Your position is Director — Drug Development, based in Brisbane and reporting to the CEO and
Managing Director. In this role, you have accountability for:






	 	•	 	achievement of key development milestones, on time and within budget,
	 
	 	•	 	adherence to shared vision, values and strategy,
	 
	 	•	 	management of the Development budget objectives,
	 
	 	•	 	effective team and project management, and
	 
	 	•	 	teamwork and personal contribution as a member of the Executive Management Team.






	 	 	You are a member of the Executive Management Team of the Company. The role of the EMT is
Capital Allocation, Group Policy, Group Strategy and Budgets, People and Other Matters of
Substance. All Executive Managers participate directly in development and planning of future
Company initiatives and opportunities.






	2.	 	Remuneration






	 	(a)	 	Your total annual remuneration package comprises a Salary and such other benefits as
are chosen by you and agreed by the Company, paid monthly in advance at the start of each
month. The total cost to the Company of the package (including Fringe Benefits Tax to the
extent applicable) is $168,000 per annum (your “Total Package”). Clause 11 of this letter
itemises













 



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	 	 	 	additional benefits that do not fall within the Total Package definition. Benefits you may
elect to include as part of your Total Package are confined to car leasing and superannuation;
information on these is available from the Office Manager.
	 
	 	(b)	 	Your Total Package will be reviewed annually with any adjustments based solely on
performance. Your next review of the Total Package will take effect on 1 January 2005.






	3.	 	Incentive Plan
	 
	 	 	You shall, in addition to the compensation detailed in the remuneration clause, be eligible to
participate in short term incentive (“STI”) and long term incentive (“LTI”) arrangements based
upon a complete calendar year in your position as follows:






	 	a)	 	Twenty percent (20%) of your Salary will be available as a maximum incentive on the
achievement of individual, team and Company goals agreed by you and myself. In broad
terms, this bonus element will be apportionable over these goals in the ratio 50:25:25.
Your maximum short term incentive for 2004 is 20% x $154,130 = $30,825.
	 
	 	b)	 	From time to time as determined by the Board, an additional long-term incentive may
be made available to you based upon the level of achievement of personal and corporate
performance. This LTI will be expressed as a right to Peplin shares or options at a
determination point or points in the future. Participation by eligible persons employed
by the Company must be approved by the Board of Peplin Biotech Limited. Your current and
past entitlement comprises 250,000 share options at $0.40 each (issued on 16 March 2001)
and 200,000 share options at $0.93 each issued 23 January 2002.






	 	 	In recognition of your personal contribution which culminated in the submission of the three
INDs in March 2004, the Company will make a one-off bonus payment to you of $15,000 before tax.
This will be paid to you in the next payroll cycle.
	 
	4.	 	Term of Employment
	 
	 	 	Your appointment as Director — Development commenced in April 2001 and will continue until
terminated in accordance with the procedures set out in Clause 17. Your start date with the
Company is 26 March 2001.
	 
	5.	 	Working Hours and Responsibilities






	 	(a)	 	As a member of the senior executive of the Company, you will appreciate that your
position is task rather than time oriented and you will be expected to
work such hours as are required for the satisfactory performance of your duties. Your Total
Package allows for such hours.










 



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	 	(b)	 	During your appointment as Director — Drug Development you shall:






	 	(i)	 	subject to the directions of the CEO and Managing Director, administer,
conduct the business of, and control and manage the productive resources of the drug
development and operations functions in an effective and efficient manner, and perform
tasks reasonably associated with that function;
	 
	 	(ii)	 	devote substantially the whole of your time and attention, during normal
commercial hours of business and at such other times as the nature of the Company’s
business shall require, to the performance of your duties and the discharge of your
responsibilities; and
	 
	 	(iii)	 	well and faithfully serve the Company to the best of your ability and use
your utmost endeavours to promote the interests of the Company in all things.






	6.	 	Annual Leave
	 
	 	 	You will be granted four weeks paid holidays per annum to be taken at a time mutually agreeable
to the CEO and Managing Director and yourself. All accruals of annual leave are maintained.
	 
	7.	 	Statutory Holidays
	 
	 	 	You will be entitled to statutory holidays observed in Brisbane.
	 
	8.	 	Long Service Leave
	 
	 	 	You will be entitled to long service leave at the rate of 8.6667 weeks after ten years
continuous service. All accruals of long service leave to date are maintained.
	 
	9.	 	Sick Leave
	 
	 	 	You are entitled to 10 days paid sick leave in any year. Sick leave entitlements are
cumulative.
	 
	 	 	For an absence in excess of five days, you must provide a medical certificate which sets out
the nature of your illness and the approximate period of absence from work.
	 
	 	 	Sick leave policy should be read in conjunction with clause 18(a)(i) of this letter.
	 
	10.	 	Superannuation
	 
	 	 	You are required to become a member of the Peplin corporate superannuation plan. This plan is
accumulation style and provides benefits in the event of










 



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	 	 	termination of employment, disablement and death. The gross amount of contributions, comprising
your individual contribution and that of the Company (currently 9% of Salary but to be
increased by 1% upon the commencement of the corporate superannuation plan), is included in
your Total Package. 


Your Salary as at 1 July each year will be used for determining contributions under the plan.
Your Salary is $154,130 per annum.






	11.	 	Job Facility Provisions






	 	(a)	 	Telephone and Internet Access
	 
	 	 	 	You are entitled to claim reimbursement of all telephone expenses for your home phone.
Business calls are to be substantiated using an FBT declaration where possible.
	 
	 	 	 	In addition, you will be provided with a mobile telephone at no cost to yourself or be
eligible to claim reimbursement for the costs of your mobile telephone.
	 
	 	 	 	Further, you will be entitled to claim reimbursement of the cost of installing and
maintaining (to a maximum of $60 per month) internet access at your home.
	 
	 	(b)	 	Car Parking
	 
	 	 	 	You are provided with motor vehicle parking at the Company’s premises at no cost to
yourself.






	12.	 	Out of Pocket Expenses
	 
	 	 	The Company shall reimburse or meet the cost of all reasonable expenses which are necessarily
incurred by you in the performance of your duties and the discharge of your responsibilities in
accordance with criteria determined from time to time by the Company. You must provide receipts
or other evidence of payment and the purpose of each expense to support each claim or outlay.
	 
	13.	 	Directorships of Other Companies
	 
	 	 	You require the prior written approval of the Board before accepting a directorship of any
company.
	 
	 	 	You are not to perform remunerated work or otherwise be engaged or concerned in any other
business or occupation whatsoever, except pursuant to this agreement, without the prior written
approval of the CEO and Managing Director.
	 
	14.	 	Company Policy
	 
	 	 	To the extent that a matter is not addressed in this letter, your engagement is governed by
detailed policies applying from time to time to the conditions of staff










 



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	 	 	employment, currently set out in the Company’s Policies and Procedures, copies of which are
available for your inspection.






	15.	 	Security of Information






	 	(a)	 	You acknowledge that -






	 	i	 	notwithstanding that you will acquire certain information in
the ordinary course of your duties, the property of the Company includes, and
will include, all confidential information and all records, documents,
accounts, plans, formulae, designs, specifications; price lists, customer
lists, correspondence and letters and papers of every description,
electronically recorded data, including all copies of or extracts from the
same, within your possession or control relating to the affairs or business of
the Company and belonging to the Company or which may come into your
possession in the course and by reason of your employment, whether or not
originally supplied by the Company (the “Company’s Documents”);
	 
	 	ii	 	the information contained in the Company’s Documents has
been, and will be, acquired by the Company at considerable effort and expense;
	 
	 	iii	 	the Company has also expended, and will also expend,
considerable effort and moneys in establishing its customer base and employee
skills; and
	 
	 	iv	 	accordingly, it is reasonable that you should be subject to
the restrictions set out in this Clause.






	 	(b)	 	You will not, either during the term of your employment or after its termination,
except in the proper course of your duties under this agreement or as required by law or
the Company, use or divulge to any person whomsoever and shall use your best endeavours to
prevent the publication or disclosure of any trade secret or any confidential information
concerning the products, business, finances, customers or trade connections of the Company
or any of its dealings, transactions or affairs and will use your best endeavours to
prevent the use or disclosure of any such information to third parties.
	 
	 	(c)	 	You shall not during your employment make, prepare, obtain or otherwise bring into
existence other than for the benefit of the Company, any records, documents, accounts,
plans, formula, designs, specifications, prices, customer lists, correspondence, letters,
papers of any description, or electronically recorded data, including any copies,
photocopies, photographs or extracts of the same relating to any matter within the scope of
the business of the Company relating to the affairs or business of the Company, nor shall
you use or permit to be used any of this material otherwise than for the benefit of the
Company. All of the material shall be and remain at all times the property of the Company
and you shall, upon termination of your










 



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	 	 	 	employment, leave the documents at the registered office of the Company.
	 
	 	 	 	Notwithstanding any of the above provisions, you will be entitled to keep, and upon
termination retain, personal diaries and records relating to your employment, for
personal use (including use in any future proceedings in which you may be directly
or indirectly involved), provided the Company is informed of the existence of such
material and provided you let the Company have copies upon request. You agree you
shall not take commercial advantage of any such personal records without the prior
consent of the Company.
	 
	 	(d)	 	You agree that all inventions, discoveries, knowledge, know-how, trade secrets,
information capable of protection by patent, copyright, design or other registration or
notification, and all other forms of intellectual property which come into your possession
or control as a direct or indirect result of your employment are the property of the
Company.
	 
	 	(e)	 	In this clause, reference to the Company includes all corporations which are related
bodies corporate.






	16.	 	Employee Privacy Consent
	 
	 	 	The Company is bound by the Privacy Act 1998 (Cth) and the National Privacy Principles
contained within that Act.
	 
	 	 	The Company may from time to time request you to provide it with personal information,
sensitive information and health information about you to enable it to administer its
employment relationship with you. If you do not provide the Company with the information which
it may request about you, then the Company may not be able to fully administer its employment
relationship with you. When requesting information from you, the Company will advise you of the
nature of the information which it requires and the consequences of not having the requested
information.
	 
	 	 	The Company may also request third parties to provide it with information about you. Such third
parties include external health service providers and other service providers engaged by the
Company to deliver services related to your employment.
	 
	 	 	You acknowledge that the personal, sensitive and health information collected about you may be
used by the Company to enable it to administer its employment relationship with you. In
particular, the Company may use the personal, sensitive and health information collected about
you to endeavour to ensure your fitness for work and safety in any of the work environments in
which you may work, together with endeavouring to ensure that you receive any prompt treatment
that may be required. You further acknowledge that the personal, sensitive and health
information collected about you may be used by the Company for any other purpose reasonably
related to your employment with the Company. You consent to any such uses of the personal,
sensitive and health information held about you by the Company.
	 
	 	 	You acknowledge that the Company may disclose the personal, sensitive and health information
which it holds about you to other companies within the Peplin










 



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	 	 	Group, the Company’s insurers and insurance loss adjusters, legal and other professional
advisers, financiers, joint venture partners, health service providers or other organisations
which have your consent or which are otherwise authorised by law to collect the personal,
sensitive and health information held about you. The Company will only disclose the personal,
sensitive and health information which it holds about you if such disclosure is necessary for a
purpose reasonably related to your employment with the Company. You consent to any such
disclosures of the personal, sensitive and health information held about you by the Company.
	 
	 	 	You may gain access to the personal information held about you by contacting the Office
Manager.
	 
	17.	 	Termination of Service






	 	(a)	 	Notwithstanding anything else contained in your current conditions of employment:






	 	(i)	 	if, in any period of twelve (12) months during the continuance of
your employment with the Company, you are unable to perform the duties of your
position for a continuous period of nine months or if in any period of
twenty-four (24) months you are unable to perform the duties of your position for
separate periods in aggregate of twelve months; or
	 
	 	(ii)	 	if you commit a wilful breach of or wilfully neglect to perform or
observe any of your obligations under your conditions of employment,
Company Policy or Code of Conduct; or
	 
	 	(iii)	 	if you commit any other act which would entitle the Company to
dismiss you summarily; or
	 
	 	(iv)	 	if you fail to observe or to perform any of the duties or
obligations imposed on you under your conditions of employment and do not correct
this failure within seven (7) days of being requested in writing by the Company
to do so,






	 	 	 	then the Company may forthwith terminate your employment under this Termination of
Employment Clause by notice in writing, effective from the date of such notice. In the
circumstances of termination of employment as a result of any of (a), (i), (ii), (iii)
or (iv) above you shall normally be paid outstanding remuneration (if any) to date of
termination, accumulated annual leave and accumulated long service leave (provided
that you have passed your pro-rata entitlement point). Annual leave and long service
leave payable shall be calculated on the basis of your Total Package. The Company
reserves the right, in the event of wilful or fraudulent misconduct, to withhold
termination payments pending resolution of the circumstances. No other payments are
applicable for termination caused by (a) (i), (ii), (iii) or (iv) of this Termination
of Employment Clause.










 



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	 	(b)	 	You may, by three months notice in writing, terminate your employment with the
Company.
	 
	 	(c)	 	The Company may, by notice in writing effective no less than three (3) months from
the date of such notice, terminate your employment under this agreement. The Company may
terminate your employment immediately or at any time during the notice period and pay to
you the Salary and Company superannuation contribution for the balance of the notice
period. Should your employment be terminated by the Company other than for the reasons
detailed in (a) (i), (ii), (iii) or (iv) of this Termination of Employment Clause, the
Company shall pay to you, in addition to the notice period, a severance payment calculated
in accordance with the relevant legislation, such payment based upon your Total Package
and determined as the number of weeks for your period of continuous service with the
Company. Details of the number of weeks for periods of continuous service under the
legislation are available from the Office Manager.
	 
	 	(d)	 	At the date of your termination of employment you shall be paid any outstanding
remuneration, accumulated annual leave and accumulated long service leave (provided that
you have passed your pro-rata entitlement point). Annual leave and long service leave
payable shall be calculated on the basis of your Total Package.
	 
	 	(e)	 	In the event of termination for any reason, your participation (if any) and in turn
your entitlement (if any) to vesting of Peplin options or shares under any Employee or
Officers Share or Option Plans shall be determined in accordance with the terms of such
Plans.
	 
	 	(f)	 	Subject to commencement of the corporate superannuation plan, in the event of
termination for any reason, your entitlements under the Peplin corporate superannuation
plan will be determined by your membership of the plan and the governing Trust Deed and
Rules.






	18.	 	Governing Law
	 
	 	 	This agreement shall be governed by and shall be construed and interpreted in accordance with
the laws of Queensland.
	 
	19.	 	Other Agreements Superseded
	 
	 	 	This agreement supersedes and replaces all other contracts of employment; understandings or
arrangements made or developed prior to your acceptance of this offer.










 



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	20.	 	Acceptance of Conditions
	 
	 	 	Please confirm your agreement with the above conditions by signing the attached copy and
returning it to me.





Yours sincerely,



/s/
Michael Aldridge




Michael Aldridge

CEO and Managing Director










 



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	21.	 	Acceptance of Conditions
	 
	 	 	Please confirm your agreement with the above conditions by signing the attached copy and
returning it to me.




Yours sincerely,




Michael Aldridge

CEO and Managing Director



I accept the conditions of my employment detailed in the letter dated 10 May 2004.




/s/ Peter
Welburn




Peter Welburn

Director — Drug Development