**EXHIBIT 3.1 a**

** **
| ** ** | **** | ** ** |
|------------|------|------------|

1 July 2007

 

Dr G.R. Collier

44 Stephens Parade

Barwon Heads, Vic  3227

 

Dear Dr Collier

 

Further to our recent discussions and reviewof your employment contract we are very pleased to confirm the conditions ofyour full-time employment as Managing Director & Chief ExecutiveOfficer of ChemGenex Pharmaceuticals Limited (‘**Company**’) as follows.

 

# **1.**            Definitions

# ** **

**‘Affiliate’** means a related body corporate (within the meaning of section 50 ofthe *Corporations Act* 2001) of theCompany;

 

**‘Board’**means the Company’s Board of Directors as constituted from time totime;

 

**‘Business’** means the business carried on by the Company;

 

**‘Business Day’** means any day, other than a Saturday, Sunday or public holiday;

 

**‘Chairman’** means the person designated as such by the Board from time to time;

 

**‘Change in Control’** occurs where anyperson (either alone or together with any associate of that person for thepurposes of Chapter 6 of the **Corporations Act****2001**(Cth), as though that Chapter applied to the Company) who, on 1 July 2007:

 

(a)              hasa relevant interest in less than 50% of the issued shares of the Company,acquires a relevant interest in 50% or more of the issued shares of theCompany; or

 

(b)              didnot have Control over the Board, acquires such Control.

 

**‘Confidential Information’** means all information ideas, concepts, data, know-how and tradesecrets (whether or not in a material form) regarding the Company, its Businessor any of its products or services, which is disclosed to you, or which isotherwise made known to you or is generated by you in the course of theEmployment, and includes without limitation:

 

(a)              formulae,scientific and technical Information, plans and product specifications;

 

(b)              Informationthat relates to the manufacture or development process used in relation to theCompany’s products and services;

 

----

 

(c)              commercialInformation about the Company and persons with whom the Company deals includinglists of clients and suppliers and their contact details and requirements;

 

(d)              financialinformation, performance or profitability reports, budgets, price lists,margins, product and market information and marketing strategies;

 

(e)              anyinformation marked “confidential” or which the Company informs you isconfidential or a trade secret and documents and other records incorporatingany Confidential Information;

 

(f)               informationthat would be of commercial value to any of the Company’s competitors; and

 

(g)              informationfound in the Company’s manuals and policies;

 

but excluding:

 

(a)              informationavailable to the public otherwise than by you breaching the Employment terms;

 

(b)              informationwhich you can prove you lawfully possessed before obtaining it in the course ofthe Employment;

 

‘**Control**’ means a power or control that isdirect or indirect or that is, or can be, exercised as a result of, by means ofor the revocation or breach of a trust, an agreement, a practice, or anycombination of them, whether or not they are enforceable.  It does not matter whether the power orcontrol is express or implied, formal or informal, exercisable alone or jointlywith someone else;

 

**‘Employment’**means your employment by the Company;

 

**‘Intellectual Property’** means all present and future intellectual or industrial propertyanywhere in the world (whether registered, unregistered or unregistrable) made,written or developed by you (alone or with others) in the course of theEmployment (in or out of working hours), whether or not capable of statutoryprotection, including:

 

(a)              inventions,ideas, discoveries, concepts, data, databases, secret process, formulae,scientific and technical information, novel designs, Confidential Information,improvement or modification of any nature;

 

(b)              computerprogram materials (including computer software, tables, charts, flow charts,algorithms, diagrams, plans, techniques, data, structures, logical ideas,concepts and processes);

 

(c)              copyright,designs, patents, know how, circuit layout rights, plant breeders rights andtrade secrets;

 

(d)              trademarks, business names, company names, services marks;

 

**‘Month’**means a calendar month;

 

**‘Moral Rights’**has the meaning given to that termin Part IX of the *Copyright Act*1968(Cth)**and includes:

 

(a)              theright of attribution;

 

PO Box 1069,Grovedale Victoria 3216, Australia  Telephone: +61 3 5227 2752  Facsimile: +61 3 5227 1322

Email:chemgenex@chemgenex.com   ABN 79 000 248304

 

----

 

(b)              theright not to have authorship falsely attributed; and

 

(c)              theright of integrity of authorship.

 

**‘Salary’** means the base salary component of the TRP;

 

**‘Share OptionPlan’** means the Company’s shareoption plan as amended from time to time, a current copy of which will beprovided to you on request;

 

**‘TRP’**means the total remuneration package of AUS$440,000 (gross) per annum, as varied fromtime to time in accordance with this letter, inclusive of:

 

(i)             basesalary;

 

(ii)            anydirectors fees to which you may be entitled as a director of the Company and/orany Affiliate;

 

(iii)           superannuation contributions; and

 

(iv)           car allowance;

 

**‘Standard’**means the Australian Fair Pay and Conditions Standard as set out inthe *Workplace Relations Act*1996 (Cth)**asamended from time to time.

 

# **2.**            Organisation relationships

# ** **

You willreport to the Chairman unless notice is given by the Company about changedreporting relationships.

 

# **3.**            Location

# ** **

The presentbase location for this position is Geelong, Victoria.  You may berequired to work at places other than the present base location.  You may also be required to travel as part ofyour duties.

 

Should the Company require youto transfer to another base location, this may occur on terms and conditions tobe discussed and agreed in writing.

 

# **4.**            Commencement Date and Term ofEmployment

# ** **

Subject toyour acceptance of this offer, the Employment will commence on 1 July 2007and will continue for a term of 5 years, subject to earlier termination inaccordance with this letter.

 

# **5.**            GeneralDuties

# ** **

You must:

 

(a)           performthe duties associated with the positions of Managing Director and Chief Executive Officerand, having regard to your role, qualifications and experience, any otherduties nominated by the Company from time to time;

 

(b)           implementthe policies of the Company in an efficient manner;

 

----

 

(c)              useyour best efforts to ensure that the Company complies with its legal and statutoryobligations;

 

(d)              promotethe interests of the Company and any Affiliate;

 

(e)              attendany meetings, conferences and interviews the Company reasonably requires;

 

(f)               ifrequired, supervise and allocate the duties of the Company’s employees;

 

(g)              complywith all lawful directions of the Company; and

 

(h)              complywith all relevant legislation.

 

# **6.**            Affiliatesand other assignments

# ** **

You must serve any Affiliate and accept office in anyAffiliate as the Company requires which, unless otherwise agreed, will bewithout additional remuneration.

 

TheCompany may require you to undertake different work assignments or jobresponsibilities during the course of the Employment, either with the Company,an Affiliate, an associated company, an associated business or organisation.  Unless otherwise agreed, there will not beadditional remuneration paid to you in respect of your performance of such workassignments or job responsibilities.

 

# **7.**            Attentionto work and hours of work

# ** **

(a)              Duringthe Employment, you must devote to your duties all your time and attention tothe Business during normal hours of work, except when on leave allowed by theterms of this letter.  Your normal hoursof work are 38 hours per week which may be worked at any time on any days by agreement, or in the absence ofagreement at the Company’s direction. Currently, days of work are Monday to****Fridayinclusive.

 

(b)              Youmust further devote your time, attention and skill exclusively to the Businessduring such hours as are necessary to meet the Business’ needs and yourindividual objectives.  This will involveworking additional hours, including on weekends and public holidays.

 

(c)              YourTRP has been calculated so as to take into account all of the hours that youmay work and may be applied in satisfaction of any entitlement you may have tobe paid for all hours that you work.

 

(d)              Yourhours of work will be averaged over each year (12 Months) of theEmployment.  For the purposes of thisclause, the first year of the Employment will commence on 1 July 2007 andsubsequent years all commence on each anniversary of that date.

 

(e)              Ifyou have any concerns about the hours that your work, you may raise this at anytime with the Company.

 

# **8.**            Outsideinterests

# ** **

(a)              During the Employment,you must not directly or indirectly:

 

----

 

(i)             engagein any outside activity (including employment, profession, trade, business,membership of House of Parliament or other public office or appointment),whether paid or unpaid; or

 

(ii)            havean interest in any business or company;

 

which could, in the Company’s opinion, conflict withyour duties without written consent of the Board.

 

(b)              Ifthe Company requests, you must disclose to the Company all your outsideactivities and interests in businesses and companies.

 

(c)              Aholding of up to 5% of the securities (as defined in the *Corporations Act*2001 (Cth)) of a companylisted on the Australian Stock Exchange is not an interest in a company for thepurpose of this clause.

 

# **9.**            Inducements

# ** **

During theEmployment, you must not accept any benefit from a third party as an inducementor reward for an act in connection with your Employment or the Business.

 

# **10.**          Total Remuneration Package

# ** **

(a)              Fromcommencement of the Employment, you will be entitled to receive the TRP.

 

(b)              Subjectto compliance with legal requirements, including minimum wage as required bythe Standard and minimum superannuation contributions to be made in accordancewith this letter, the TRP will be allocated solely at your discretion anddirection or as otherwise agreed between the parties from time to time.  However, where an allocation or agreement forpayment of the TRP results, or will result, in a fringe benefit tax or otherliability to the Company, then the amount of the tax or liability incurred orto be incurred by the Company will be counted as part of the TRP.

 

(c)              YourSalary (after tax and authorised deductions) will be paid Monthly by directdeposit into an Australian bank or financial institution account nominated byyou.

 

(d)              Inaccordance with the Company’s current policy, the TRP will be reviewed in July eachyear of the Employment.  A review willnot necessarily result in an increase of all or any part of the TRP.

 

(e)              Itis agreed that your Salary is the basis for calculating superannuationcontributions and your entitlements upon termination of Employment, includingany payments due in lieu of untaken annual leave or long service leave.

 

# **11.**          Share Option Plan

# ** **

It is proposedthat you will be issued  options in theCompany expiring on 31 July 2012, subject to shareholder approval andsubject to the terms of the Share Option Plan. The issue of options under the Share Option Plan will be subject toreview annually.

 

# ****

# ** **

# **12.**          Incentive Plan

# ** **

In addition tothe TRP and the options set out in clause 11, you will be eligible toparticipate in an incentive plan.  Thisincentive plan provides the opportunity for you to be issued with furtheroptions in the Company, subject to the achievement of milestones and/or keyperformance indicators as defined by the Board. These milestones and/or key performance indicators will be discussed andsettled with you during the preparation of the Company’s business plans andbudget for each ensuing financial year.

 

Details of theincentive plan for each financial year will be confirmed to you by separateletter annually.

 

# **13.**          Superannuation

# ** **

(a)              Aspart of the TRP, the Company will pay superannuation contributions on yourbehalf of the minimum amount required to ensure that the Company is not subjectto any statutory charge under the *SuperannuationGuarantee (Administration) Act*1992 (Cth) in respect of theEmployment.  While you cannot decreasethis contribution, you may increase the amount of such contribution inaccordance with clause 10(b).

 

(b)              You may direct yoursuperannuation contributions to a regulated complying superannuation fund ofyour choice nominated in writing by you to the Company, subject to you firstproviding information to the Company about your chosen fund in the form of thestandard choice form and as reasonably required by the Company.  If you do not advise the Company about yourchosen fund or if your nominated fund is not a regulated complyingsuperannuation fund, your contributions will be made to the Company’s defaultsuperannuation fund.

 

(c)              TheCompany makes no guarantee, nor is it required to assure, the availability ofbenefits from any superannuation fund(s).

 

# **14.**          Annual Leave

# ** **

You areentitled to annual leave in accordance with the Standard and the Company’sannual leave policy.  As a full-timeemployee, under the Standard you will receive 20 working days annual leave perannum.  It is expected that annual leavewill be taken within twelve (12) Months of it falling due at a time agreedbetween yourself and the Company.  Thereis no loading paid on annual leave.

 

# **15.**          Public Holidays

# ** **

The Companyobserves public holidays legislated or proclaimed for the State of Victoria, inaccordance with the *Public**Holidays Act*1993**(Victoria).  You willbe entitled to paid time off work on legislated or proclaimed days that fall onyour normal days of work, or substituted days by agreement.

 

# **16.**          Long Service Leave

# ** **

Long serviceleave entitlements accrue and are paid in accordance with the provisions of the*Long Service Leave Act*1992(Victoria).  Currently, the entitlement isthirteen (13) weeks leave after fifteen (15) years continuous Employment, witha 

 

----

 

partialentitlement to take leave after ten years continuous service and a partialentitlement when Employment ends after 7 years continuous service in certaincircumstances.

 

# **17.**          Sick Leave

# ** **

(a)           Youwill be entitled to paid personal (sick)/carer’s leave at the rate of ten (10) daysper annum, to be accrued and taken in accordance with the Standard and theCompany’s policy.

 

(b)           You may be required toprovide the Company with a medical certificate from a registered healthpractitioner or a statutory declaration made by you to substantiate the needfor any period of personal (sick)/carer’s leave

 

(c)           Personal(sick)/carer’s leave not used will accumulate for the term of the Employment.

 

(d)           Nopayment will be made in lieu of unused personal (sick)/carer’s leave, eitherduring the Employment or on termination of the Employment, however caused.

 

# **18.**          Parental Leave

# ** **

You areentitled to unpaid parental leave (maternity, paternity, adoption leave) inaccordance with the Standard.

 

Currently, tobe eligible for such leave, an employee must have had at least twelve (12)Months continuous service with his or her employer immediately preceding thedate on which he or she commences leave.

 

It isacknowledged and agreed that in circumstances where you have not had at leasttwelve (12) Months continuous Employment immediately preceding the date onwhich you seek to commence parental leave, such that you are not entitled toleave in accordance with the provisions of the Standard, the Company is underno obligation to grant any other type of paid or unpaid leave to you.

 

# **19.**          Performance Review

# ** **

Yourperformance will be reviewed and discussed with you at least every six (6) Months,consistent with the conduct and practice of the Company’s performancemanagement system.  This is an importantopportunity for formal two-way communication about your performance, thecontent of your position and your future development.  It will include setting of objectives and/orkey performance indicators and, on occasions, adjustment of theaccountabilities and responsibilities expected of your position.

 

# **20.**          Expenses

# ** **

The Company will reimburse youfor reasonable Business-related expenses incurred by you in the performance ofyour duties, provided that you provide the Company with receipts or otherevidence of payment, and of the purpose of each expense, in a form reasonablyrequired by the Companyand otherwise in accordance with the Company’s expense reimbursementpolicy.

 

----

# ** **

# **21.**          Company Policies

# ** **

You will be bound by the employment policiesand procedures adopted by the Company as varied from time to time, includingpolicies dealing with Harassment, Equal Opportunity and Anti-discrimination andSmoking in the Workplace.  You arerequired to be familiar with these policies and procedures and to comply withthem.  Acurrent copy of the Company’s employment policies and procedures is availableat the workplace.

 

# **22.**          Issues, Grievances and Disputes

# ** **

If any issue, grievance or dispute arises, itmust be dealt with in the following manner before either party commences anyproceedings in any court, commission, tribunal or other judicial orquasi-judicial forum:

 

(a)           Thematter must first be discussed by you with the Chairman.

 

(b)           If notsettled, the matter must then be discussed with the Chairman and two other nonexecutive directors appointed by the Board for this purpose.

 

(c)           If thematter is not resolved, it may be submitted to an agreed mediator by eitheryourself or the Company for the purposes of conciliation or mediation.  At this stage either you or the Company maybe represented by an adviser or advocate (e.g., barrister or solicitor).

 

(d)           Untilthe matter is resolved your responsibilities must be exercised at the directionof the Company.  No one shall beprejudiced as to the final settlement by the continuance of work in accordancewith this process.

 

(e)           Youand the Company must cooperate to ensure that these procedures are carried outexpeditiously.

 

# **23.**          Termination of Employment

# ** **

(a)           TheEmployment may be terminated by either yourself or the Company by giving six (6) Monthsnotice in writing, or by the Company without notice by paying six (6) MonthsSalary in lieu of notice.

 

(b)           Wheneither you or the Company has given notice of termination of the Employment,the Company may require you to do all or any one or more of the following:

 

(i)             notperform any work for it;

 

(ii)            not attend the Company’s place(s) ofbusiness;

 

(iii)           not contact other staff ofthe Company, unless with the prior agreement of the Chairman;

 

(iv)           not contact the Company’scustomers and/or clients , unless with the prior agreement of the Chairman;

 

(v)            performonly those duties which the Company specifies to you.

 

----

 

(c)           The Company has the right to terminate the Employment without notice formisconduct or serious or persistent breach of your terms or conditions ofEmployment and in such case your Salary and other statutory entitlements willbe paid up to the time of termination only.

 

(d)           In the event that the Employment is terminated other than for thereasons noted in clause 23(c) onor within six (6) Months after the a Change in Control, all of youroptions in the Company that have not yet vested as of the date of yourtermination will accelerate and be deemed to have vested as of the date of yourtermination and you will have 180 days to exercise the vested portions of anysuch options.

 

# **24.**          Confidentiality

# ** **

(a)           TheCompany owns all Confidential Information.

 

(b)           Duringand after the Employment, you must:

 

(i)            keepall Confidential Information confidential

 

(ii)           complywith all measures established by the Company to safeguard ConfidentialInformation from access or unauthorised use or disclosure; and

 

(iii)          use your best endeavours toprevent the unauthorised use or disclosure of Confidential Information by anyperson.

 

(c)           Youmust not at any time during or after the Employment use or disclose anyConfidential Information or make a copy or any other record of any ConfidentialInformation except:

 

(i)            inthe proper performance of your duties while employed by the Company;

 

(ii)           as required by law; or

 

(iii)          with the Company’s priorwritten consent.

 

(d)           Ondemand by the Company and at the end of Employment, you must:

 

(i)            deliverto the Company all Confidential Information in your possession or control andthen;

 

(ii)           deleteall Confidential Information held electronically in any medium in yourpossession or control.

 

# **25.**          Return of documents andequipment

# ** **

Without limiting clause 24(d), upon termination of theEmployment, however caused, you must:

 

(a)        return tothe Company or its authorised representative all policies, procedures, plans,statistics, documents, records, data, computer tapes or discs, papers, stationery, cheque books, books, access cards, keys, mobiletelephones, computer hardware, credit cards, motor vehicles or other equipment in your possession orcontrol which relate in any way 

 

----

 

to theBusiness or the affairs of the Company or any Affiliate, or belongs to theCompany or any Affiliate.  You are notentitled to retain all or any part of any of the things referred to in thisclause; and

 

(b)       advise theCompany of all log-on codes for Company electronic equipment used by you duringthe Employment.

 

# **26.**          Intellectual Property

# ** **

(a)           Youagree that any and all rights and interests you may have in any IntellectualProperty produced, invented or conceived by you:

 

(i)            inthe course of the Employment;

 

(ii)           at theCompany’s direction or request; or

 

(iii)          inconnection with the Business or any of the Company’s products or services;

 

(whether alone or jointly with another person and whether before orafter the Employment commences ) automatically vests in the Company without anyrequirement to make payment to you.

 

(b)           Youmust immediately disclose any Intellectual Property to the Company promptlyafter it is bought into existence.

 

(c)           Youmust, at the Company’s expense, execute all documents and do all other thingsreasonably necessary to:

 

(i)            enablethe Company or its nominee to register any Intellectual Property anywhere inthe world; and

 

(ii)           effector perfect the transfer to the Company, or its nominee, of your rights andinterests in any of the Intellectual Property that is the subject of clause 26(a).

 

(e)           Youconsent to all acts or omissions by the Company (whether occurring before orafter the Employment) that infringe any Moral Rights that you may have orbecome entitled to in any literary, dramatic, musical or artistic work or filmcreated by you:

 

(i)            inthe course of the Employment;

 

(ii)           at theCompany’s direction or request; or

 

(iii)          inconnection with the Business or any of the Company’s products or services.

 

(f)            Yourobligations under this clause 26 will continue after thetermination of the Employment, however caused.

 

(g)           On demandby the Company and at the end of the Employment, you must:

 

(i)            deliverto the Company or its nominee all Intellectual Property in your possession orcontrol and then:

 

----

 

(ii)           deleteall Intellectual Property held electronically in any medium in your possessionor control.

 

(h)           Duringand after the Employment, you must do anything the Company reasonably requires(at the Company’s cost):

 

(i)            toobtain statutory protection (including by patent, design registration orcopyright) for the Intellectual Property for the Company in any country;

 

(ii)           toperfect or evidence the Company’s ownership of the Intellectual Property.

 

(i)            Youirrevocably appoint the Company and any director of the Company jointly andseverally to be your attorney to sign any instrument on your behalf and to doany act in your name to give effect to this clause 26, including to do any ofthe things you are required to do under clause 26(c).

 

# **27.**          Non solicitation

# ** **

You agree that you will not for yourself orfor any other person, for twelve (12) Months after the Employment ends, withinAustralia, without the written consent of the Company, directly or indirectlydo any of the following:

 

(a)           solicit,interfere with or endeavour to entice away from the Company any person, firm orcompany who was or has been, during the last twelve (12) Months of theEmployment, a client or customer of the Company to whom you provided servicesduring the last twelve (12) Months of the Employment;

 

(b)           solicit,interfere with or endeavour to entice away from the Company any employee of theCompany who works in a position where the Businesswould be damaged by the loss of their skills;

 

(c)           provideaccept any request to provide services **in a position the same as or substantially similarto the position you held in the Business** to, or accept employment with a person, firmor company who was or has been, during the last twelve (12) Months of theEmployment, a client or customer of the Company to whom you provided servicesduring the last twelve (12) Months of the Employment;

 

(d)           counsel,procure or assist any person or company to do any of the acts referred to inthis clause.

 

The validity of each separatenon-solicitation obligation in this clause will not be affected by theinvalidity of any one of more of the non-solicitation obligations.

 

# **28.**          Amendment

# ** **

The terms of the Employment set out in thisletter may only be amended in writing signed by the parties.

 

----

 

# ** **

# **29.**          Governing law

# ** **

The Employment, these terms and conditionsand the determination of any disputes or claims arising in relation to them aregoverned by the laws of the State of Victoria.

 

# **30.**          Representation

# ** **

We trust that the terms and conditions ofemployment outlined in this letter are consistent with and include all theprincipal issues covered during our discussions.  If you have any concerns about these matters,please contact us prior to indicating your acceptance of this offer ofemployment.  Unless you raise any suchconcerns, by signing this letter you agree that:

 

(a)              thisletter records the entire agreement between the parties about the Employment;and

 

(b)              neither party has givenany warranty or made any representation to the other party about theEmployment.

 

Please indicate your acceptance of the termsand conditions your employment set out in this letter, by signing the duplicatecopy and returning it to us as soon as practicable.

 

Yours sincerely

 

 
|             |   |
|------------------|--------|
| J. B. L. Heading |   |
| Chairman         |   |

 

 

Acceptance

 

I confirm acceptance of the terms andconditions of my employment set out in this letter.

 
|     |
|----------|
| [ ] |
| (signed) |   |

 

 
| 1st July 2007 |   |
|--------------------|--------|
| (date)             |   |

 

----