Document:

Exhibit
4.1(j)

 

ChemGenex Therapeutics, Inc.

 

May 6, 2001

 

Tina
Herbert

5978
Smith Avenue

Newark,
CA 94560

 

 

Dear
Tina:

 

ChemGenex
Therapeutics, Inc (“ChemGenex” or  the “Company”) is pleased to offer
you the position of Senior Director of Finance, on the following terms.

 

In
this full-time, exempt level position, you will report to the Executive Vice
President of Corporate Development, and wil1 initially work at our corporate
headquarters in Menlo Park, California.

 

Other
details regarding the offer are as follows­

 

Start
Date. If you accept our
offer, we would like your effective start date to be June 4, 2001.

 

Base
Salary. Your base
salary will be $12,500 monthly, less standard payroll deductions and
withholdings. You will be paid on a semi-monthly basis and you will be eligible
for the following standard Company benefits: medical insurance, vacation, sick
leave, holidays. Information regarding ChemGenex’s benefit plans will be
provided to you at your new hire orientation. The Company may modify compensation
and benefits from time to time as it deems necessary. Information regarding
ChemGenex’s benefit plans will be provided to you at your new hire orientation.

 

Bonus Plan. You will also be eligible to participate in
ChemGenex’s performance bonus plan, under which you would be eligible to
receive an annual bonus of up to 15% of your base salary. Payout of any
performance bonus is contingent on your achievement of performance objectives
set mutually by you and ChemGenex management as well as the Company’s overall
financial performance. Please note that at the discretion of management, the
bonus plan may be terminated or modified at any time.

 

Stock
Options. Upon your hire
by ChemGenex and upon approval of the ChemGenex’s Board of Directors (“the
Board”), you will be granted an incentive stock option to purchase 100,000
shares of common stock of ChemGenex with an exercise price equal to the fair
market value of the stock, determined by the Board at its next regular meeting
after your start date (the “Option”). The Option shall be subject to the following
vesting schedule: 1/4th vesting upon acceptance of this offer and
then 1/48th vesting each month

 

 

34700 Campus Drive, Fremont; CA 94555 (510) 494-7732 Fax (510)
742-8510

 

 

thereafter
of your continuous service with ChemGenex. The Option and all stock purchased
pursuant to the Option shall be subject to the terms of ChemGenex’s Equity
Incentive Plan, as that Plan is developed, and the standard stock grant
agreement that will be provided to you pursuant to the Plan.

 

Company
Policies and Employee Proprietary Information and Inventions Agreement. As a ChemGenex employee, you will be expected
to abide by all rules and regulations of ChemGenex and to sign and comply with
the attached Employee Proprietary Information and Inventions Agreement.

 

Normal
Working Hours. Normal
working hours are from 9:00 a.m. to 5:00 p.m., Monday through Friday. As an
exempt level employee, you will be expected to work additional hours as required by the nature of your work
assignments.

 

Employment
Relationship. You may
terminate your employment with ChemGenex at any time, for any reason or no reason
whatsoever simply by notifying the Company. Likewise, ChemGenex may terminate
your employment at any time and for any reason whatsoever, with or without cause
or advance notice. This at-will employment relationship cannot be changed
except in writing signed by an authorized ChemGenex officer. Participation in
any of our benefit programs is not to be regarded as a guarantee of continued
employment for any particular period of time. In addition, ChemGenex may change
your position, duties, work location, benefits, and compensation from time to
time as it deems necessary.

 

Introductory
Period. The first sixty
(60) days of your employment with ChemGenex will be an introductory period
intended to give you the opportunity to demonstrate your ability to perform
your duties satisfactorily and to determine whether your new position meets your
expectations. We encourage you to use this time to raise with your managers any
questions you might have about the position or about ChemGenex generally, and
to assist us in making your transition into the Company as comfortable as
possible. You will begin accruing vacation benefits with ChemGenex upon your
first day of employment. As set forth in the paragraph above, both you and
ChemGenex may terminate the employment relationship at any time for any reason
both during and after the Introductory Period.

 

Eligibility,
to Work in the United States. As required by law, this offer is subject to satisfactory proof of your
right to work in the United States. Please note that because of regulations
adopted in the Immigration Reform and Control Act of 1986 (IRCA),, we will
require that you present documentation demonstrating that you have
authorization to work in the United States on your first working day. If you
have any questions about this requirement, which applies to U.S. citizens and
non-U.S. citizens alike, please contact Dennis Brown, CEO of ChemGenex.

 

 

CHEMGENEXTM

34700 Campus Drive, Fremont, CA
94555 (514) 494-7732 Fax (514) 742-8514

 

 

Arbitration. To ensure rapid and economical resolution of
disputes which may arise an connection with your employment with ChemGenex, you
and ChemGenex agree that any and all disputes, claims (e.g., contract claims,
tort claims, statutory claims, discrimination or harassment claims), or causes
of action arising from or relating to your employment with ChemGenex will be
resolved to the fullest extent permitted by law by final and binding
confidential arbitration held in San Francisco, California through Judicial
Arbitration and Mediation Services, Inc. (“JAMS”) under its rules and
procedures for arbitration of employment disputes; provided, however, that
either party may obtain injunctive relief from a court if necessary to preserve
the status quo pending the outcome of the arbitration or in circumstances where
the arbitrator lacks authority to issue injunctive relief. JAMS will provide a
list of 5 arbitrators from which both parties may eliminate 2 to obtain the
final arbitrator. By agreeing to this arbitration procedure, both you and
ChemGenex waive the right to resolve any such disputes through a jury trial,
court trial, or administrative proceedings. Each party will bear its own
attorney fees, and the cost of the arbitration Will he
borne equally by both parties.

 

Complete
Agreement. This letter,
together with your Employee Proprietary Information and Inventions Agreement,
forms the complete and exclusive statement of your employment agreement with
ChemGenex. The employment terms in this letter supersede any other agreements
or promises made to you by anyone, whether oral or written.

 

As
acceptance of the employment terms described above, please sign and date this
letter and return one original to the undersigned by May 11, 2001, after which
time this offer will expire. A duplicate original of this offer letter is
enclosed for your records.

 

We
look forward to a favorable reply and the opportunity of working with you to
create a successful Company.

 

Very
truly yours,

 

	
  /s/
  Dennis M. Brown

  	
   

  

Dennis
M. Brown Chief Executive Officer

 

ChemGenex
Therapeutics, Inc.

 

 

I accept the employment terms stated in this letter, and agree to
commence employment on June 4, 2001.

 

 

	
  /s/ Tina Herbert

  	
   

  
	
  NAME

  

Date

 

	
  5/11/01

  	
   

  

Enclosure: 
Proprietary Information and Inventions AgreementExhibit 4.2(a)

 

AUTOGEN LIMITED

ABN 79 000 248 304

 

EMPLOYEE SHARE OPTION PLAN

 

PLAN RULES

 

 

1.             DEFINITIONS AND INTERPRETATION

 

1.1          Definitions

 

In these Rules the following words and expressions
have the meanings indicated unless the contrary intention appears:

 

“ASX”
means Australian Stock Exchange Limited or any successor body.

 

“Board”
means all or some of the Directors acting as a board.

 

“Bonus Share” means a Share issued as part of a pro rata bonus issue to
shareholders of the Company.

 

“Company”
means Autogen Limited ACN 000 248 304.

 

“Director”
means a director of the Company.

 

“Employee”
means a person in the employment of the Company or a Subsidiary and any other
person whose contribution to the Company is considered by the Board, at its
complete discretion, to warrant participation in the Plan.

 

“Exercise Date” means such date as the Board may have determined and notified to a
Participant in writing at the time of grant of an Option.

 

“Exercise Loan” means a loan made by the Company or a Subsidiary to a Participant
under Rule 6 for the purpose of acquiring a Share by the exercise of an
Option.

 

“Exercise Loan Period” means in respect of each Exercise Loan the period determined under
Rule 6.

 

1

 

“Exercise Price” means the amount, as determined by the Board and specified at the
time an Option is granted, that must be paid by a Participant to acquire a
Share by the exercise of an Option.

 

“Issue Price” means the amount (if any), as determined by the Board and specified
at the time an Option is granted, that must be paid by an Executive to acquire
an Option.

 

“Listing Rules” means the Official Listing Rules of ASX.

 

“Loan Share” means a Share acquired by the exercise of an Option where the
Exercise Price is funded with an Exercise Loan which has not been repaid in
full in respect of that Share.

 

“Option”
means an option granted under the Plan to subscribe for a Share or Shares.

 

“Option Loan” means a loan made by the Company or a Subsidiary to an Employee
under Rule 3 for the purpose of acquiring an Option.

 

“Option Loan Period” means in respect of each Option Loan the period determined under
Rule 3.

 

“Participant” means an Employee who holds an Option granted or a Loan Share
issued under the Plan.

 

“Performance Conditions” means one or more conditions (if any), as determined by the Board,
which must be satisfied or waived by the Board before an Option may be
exercised.

 

“Plan”
means the Autogen Limited Executive Option Plan established in accordance with
these Rules.

 

“Rights”
means any rights to acquire shares, options or securities granted or issued or
to be granted or issued by the Company.

 

“Rules”
means the rules of the Plan.

 

“Share”
means a fully paid ordinary share in the capital of the Company.

 

“Share Registry” means the share registry appointed from time to time by the
Company.

 

2

 

“Special Circumstances” means Total and Permanent Disablement or death of a Participant
and, subject to the Listing Rules, such other circumstances as determined by
the Board in its absolute discretion and notified to a Participant in writing.

 

“Subsidiary” means a subsidiary, as defined in the Corporations Law, of the
Company.

 

“Total and Permanent Disablement” in relation to a Participant means that the Participant has, in the
opinion of the Board, after considering such medical and other evidence as it
sees fit, become incapacitated to such an extent as to render the Participant
unlikely to engage in an equivalent occupation for which he or she is
reasonably qualified by education, training or experience.

 

1.2          Interpretation

 

In these Rules unless the contrary intention appears:

 

(a)           the singular includes the plural and vice versa;

 

(b)           a gender includes all genders;

 

(c)           a reference to any legislation or to any provision of any
legislation includes any modification or re-enactment of it, any legislative
provision substituted for it and all regulations and statutory instruments
issued under it;

 

(d)           a reference to these Rules or any particular part of these Rules
means these Rules or the relevant part as amended from time to time;

 

(e)           a reference to a person includes a reference to the person’s
executors, administrators and successors, a firm or a body corporate.

 

1.3          Headings

 

Headings are inserted for convenience and do not
affect the interpretation of these Rules.

 

3

 

2.             COMMENCEMENT OF PLAN AND GRANT OF OPTIONS

 

2.1          Commencement

 

The Plan will commence on the later of the date on
which the Plan is approved by shareholders of the Company and the Board
determining that the Plan commence.

 

2.2          Eligibility

 

The Board may in its absolute discretion, subject to
any approval of shareholders of the Company required by law or the Listing
Rules, at intervals determined by the Board, offer or grant Options to
Employees selected by the Board.

 

2.3          Grant of Options

 

The Board will determine the procedure for granting
Options to Participants, including the form and content of any invitation,
offer or acceptance procedure, the Issue Price (if any), Performance Conditions
(if any), Exercise Price, the expiry date of the Options (if any) and any other
terms or conditions the Board considers appropriate and which are not
inconsistent with these Rules.

 

3.             OPTION LOAN

 

3.1          Offer of Option Loan

 

At the discretion of the Board the Company or a
Subsidiary may offer an Employee an Option Loan on terms and conditions to be
determined by the Board.

 

3.2          Option Loan Terms

 

Unless otherwise determined by the Board:

 

(a)           Timing

 

An
Option Loan (if any) will be made at the time an Employee acquires an Option.

 

(b)           Amount

 

The
amount of the Option Loan shall equal the sum of the Issue Price of the
particular Options granted together with any duties payable by the Employee in
respect of the Option Loan.

 

(c)           Application of Option Loan moneys

 

4

 

An
Employee who accepts an Option Loan will irrevocably authorise the Company or
the Subsidiary (as the case may be) to apply the Option Loan on behalf of the
Employee by way of payment of the Issue Price of the Options granted to the
Employee and the payment of any duties payable by the Employee in respect of
the Option Loan.

 

(d)           Option Loans Interest free

 

Unless otherwise determined by the Board an Option
Loan shall not bear interest.

 

(e)           Option Loan Period

 

The Option Loan Period is the period commencing when the Option Loan is
made and ending on the first to occur of the following:

 

(i)            termination of the
Participants employment with the Company or a Subsidiary;

 

(ii)           termination of the
Participant’s employment with such other entity as specified in the invitation
or offer issued under Rule 2.3 or termination of the Participant’s contractual
arrangements with the Company, a Subsidiary or such other entity as specified
in the invitation or offer issued under Rule 2.3;

 

(iii)          expiry of the Option to
which the Option Loan relates;

 

(iv)          buy-back of the Option in
accordance with Rule 5;

 

(v)           the sale of Shares (not
being Loan Shares) acquired by the exercise of an Option where the Issue Price
was funded with an Option Loan; and

 

(vi)          the Company agreeing to sell
Loan Shares as requested by a Participant in accordance with Rule 7.3,
where the Loan Shares were acquired by the exercise of an Option where the
Issue Price was funded by an Option Loan.

 

(f)            Repayment

 

(i)            A Participant may repay
all or part of an Option Loan at any time before the expiry of the Option Loan
Period.

 

5

 

(ii)           Subject to Rule 6.2(e)(iv),
the balance of the Option Loan outstanding at the end of the Option Loan Period
must be repaid in full at the expiration of the Option Loan Period.

 

6

 

3.3          Option Loans by Subsidiaries

 

Where an Employee is employed by a Subsidiary the loan
may, at the discretion of the Board, be offered to that Employee, and made, by
that Subsidiary.

 

4.             OPTION TERMS

 

4.1          Entitlement

 

(a)           Subject to the Rules, each Option entitles the holder to subscribe
for and be allotted, credited as fully paid, one Share at the Exercise Price.

 

(b)           Unless the Rules or the terms upon which an Option has been granted
provide otherwise, a Share issued on the exercise of an Option will rank pari
passu with all existing Shares from the date of issue and will be entitled to
those dividends which have a record date for determining entitlements after the
date of issue.

 

4.2          Conditions for exercise of Options

 

(a)           At the time an Option is granted the Board may impose such
Performance Conditions (if any) as it considers appropriate.

 

(b)           Subject to Rule 4.4 an Option may be exercised only if the
Performance Conditions (if any) relating to it have been satisfied or waived by
the Board.

 

4.3          Exercise Date

 

(a)           Unless the Board otherwise determines and subject to Rule 4.3(b), a
Participant may not exercise an Option before the Exercise Date for the Option.

 

(b)           Subject to Rule 4.2(b), where due to the occurrence of Special
Circumstances a Participant has ceased to be employed by the Company or a
Subsidiary or termination of the Participant’s employment or the contractual
arrangements referred to in Rule 3.2(e)(ii) has occurred, the Participant may
exercise the Option within ninety (90) days after the Special Circumstance has
occurred.

 

7

 

4.4          Method of exercise of Options

 

(a)           An Option is exercisable by the Participant providing to the company
secretary of the Company or such other person as the Board designates, the
following:

 

(i)            a completed notice (in the
form required by the Company) of exercise of Option and application for Shares;

 

(ii)           the relevant Option
certificate;

 

(iii)          a request in writing for an
Exercise Loan (in accordance with rule 6.1), if relevant; and

 

(iv)          payment of the Exercise
Price, which may be satisfied in whole or in part by an Exercise Loan.

 

(b)           Options must be exercised in multiples of 100, unless the
Participant exercises all Options able to be exercised at that time.  The exercise of some Options only does not
affect the Participant’s right to exercise other Options at a later time.  If the Participant exercises less than all
Options represented by a certificate then the Company will cancel the
certificate and issue a new certificate for the balance.

 

4.5          Expiry of Options

 

An Option not exercised will expire on the first to
occur of the following:

 

(a)           the tenth anniversary of the date of grant of the Option unless the
Board in its discretion has determined at the time of any invitation or offer
of options in accordance with Rule 2.3 that another expiry date is to apply to
an Option;

 

(b)           the expiration of the time within which the Option must be exercised
under Rule 4.3(b);

 

(c)           subject to Rule 4.3(b), when before the Exercise Date the Participant
has ceased to be employed by the Company or a Subsidiary or termination of the
Participant’s employment or termination of the contractual arrangements
referred to in Rule 3.2(e)(ii) has occurred;

 

(d)           such date as specified by the Board if it determines that the
Participant has committed any act of fraud, defalcation or gross misconduct.

 

8

 

4.6          No transfers or encumbrances

 

Subject to Rule 5, options are not transferable and a
Participant must not encumber or otherwise deal with the Options.

 

4.7          Quotation of Options

 

Options will not be quoted on ASX.

 

4.8          Participation in future issues

 

(a)           Participation Generally

 

A
Participant cannot participate in new issues of securities to holders of Shares
unless the Option has been exercised and the Shares are allotted and registered
in respect of the Option before the record date for determining entitlements to
the issue.  The Company must give notice
to Participants of any new issue before the record date for determining
entitlements to the issue in accordance with the Listing Rules.  Options can only be exercised in accordance
with the terms contained in this Rule 4.

 

(b)           Bonus Issues

 

If the
Company makes a pro rata bonus issue of Shares to holders of Shares (other than
an issue in lieu or in satisfaction of dividends or by way of dividend
reinvestment) and no Shares have been allotted and registered in respect of an
Option before the record date for determining entitlements to the bonus issue,
then the number of Shares or other securities for which the Participant is
entitled to subscribe on exercise of the Option is increased by the number of
Shares or other securities that the Participant would have received if the
Option had been exercised before the record date for the bonus issue.

 

(c)           Rights Issues

 

If the
Company makes a pro rata issue of securities (except a bonus issue) to the
holders of Shares (other than an issue in lieu or in satisfaction of dividends
or by way of dividend reinvestment) the exercise price of an Option shall be
reduced according to the formula specified in the Listing Rules.

 

9

 

(d)           Reconstruction

 

In the
event of any reconstruction of the issued ordinary capital of the Company the
number of Shares attaching to each Option or the Exercise Price per Share of an
Option or both will be reconstructed in the manner as specified in the Listing
Rules.  If the manner is not specified in
the Listing Rules then the Board will determine the reconstruction provided
that the number of Options or the Exercise Price, or both, must be reorganised
so that the Participants will not receive a benefit which the shareholders of
the Company do not receive.  This Rule
does not prevent a rounding up of the number of securities to be received on
exercise if the rounding up is approved at the security holders’ meeting that
approves the reconstruction.

 

(e)           Advice

 

The
Company will give notice to each Participant of any adjustment to the number of
Shares that the Participant is entitled to subscribe for or be issued on
exercise of an Option or the Exercise Price per Share in accordance with the
Listing Rules.

 

4.9          Quotation of Shares

 

If at the time Shares are issued upon the exercise of
Options, Shares are quoted on ASX, the Company must as soon as practicable make
application to ASX for quotation of those Shares.

 

5.             BUY BACK OF OPTIONS

 

5.1          Buy-back before expiry

 

Where an Issue Price has been paid upon grant of an Option, then unless
otherwise determined by the Board, the Company will immediately before the
expiry of the Option pursuant to Rule 4.5, buy-back the Option from the
Participant for an amount equal to the Issue Price of the Option.

 

5.2          Buy-back amount offset against Option Loan

 

Where an Option Loan is outstanding in respect of an Option, payment of
the amount by the Company under Rule 5.1 will be satisfied by being offset
against the amount of the Option Loan outstanding in respect of the Option
bought-back and the Participant shall have no further obligation to the Company
for the Option Loan in respect of that Option.

 

10

 

6.             EXERCISE LOANS

 

6.1          Offer of Exercise Loan

 

At the discretion of the Board the Company may offer a Participant an
Exercise Loan on terms and conditions to be determined by the Board.

 

6.2          Exercise Loan terms

 

Unless otherwise determined by the Board:

 

(a)           Timing

 

An Exercise Loan will be made at the time, or times, the Participant
exercises the Options.

 

(b)           Amount

 

The amount of the Exercise Loan shall equal the sum of the Exercise
Prices of Options which the Participant exercises and for which the Participant
has been offered an Exercise Loan together with any duties payable by the
Participant in respect of the Exercise Loan.

 

(c)           Application of Exercise Loan moneys

 

A Participant who accepts an Exercise Loan will irrevocably authorise
the Company or a Subsidiary (as the case may be) to apply the Exercise Loan on
behalf of the Participant by way of payment of the Exercise Price of the Options,
the exercise of which determined the amount of the Exercise Loan under
Rule 6.2(b) and the payment of any duties payable by the Participant in
respect of the Exercise Loan.

 

(d)           Exercise Loans Interest Free

 

Unless otherwise determined by the Board, Exercise Loans shall not bear
interest.

 

(e)           Exercise Loan Period

 

The Exercise Loan Period is the period commencing when the Exercise
Loan is made and ending on the first to occur of the following:

 

11

 

(i)            the date on which the
Participant ceases to be employed by the Company or a Subsidiary or the
contractual arrangements referred to in Rule 3.2(e)(ii) are terminated;

 

(ii)           the Company agreeing to
sell the Loan Shares as requested by a Participant in accordance with Rule 7.3;
and

 

(iii)          the Participant forfeiting
the Loan Shares in accordance with Rule 8.

 

(f)            Repayment

 

(i)            A Participant may repay
all or part of an Exercise Loan at any time before the expiration of the
Exercise Loan Period;

 

(ii)           Unless otherwise determined
by the Board, the Company will apply and each Participant irrevocably directs
the Company to so apply all dividends paid in cash on the Loan Shares towards
repayment of the Exercise Loan;

 

(iii)          The amount of the dividend
applied pursuant to paragraph (ii) shall not exceed the after tax value of the
dividends computed on the assumption that the Participant is assessable to tax
at the highest personal marginal rate of income tax in Australia applicable to
Australian residents (including for this purpose the Medicare Levy but not the
Medicare Surcharge) on the whole of the dividend and after allowing for any
franking rebate to which the Participant is entitled in relation to the
dividend;

 

(iv)          At the expiration of the
Exercise Loan Period, and not before, the amount to be repaid in aggregate for
the Exercise Loan and the Option Loan (to the extent it is outstanding at the
end of the Exercise Loan Period) shall be the lesser of the followings amounts:

 

A.            the sum of the Exercise
Loan and Option Loan less any amounts already paid in reduction thereof; and

 

B.            the market value of the
Loan Shares at the end of the Exercise Loan Period which for such purposes will
be the market value as determined in accordance with Section 139FA of the
Income Tax Assessment Act 1936 as amended from time to time.

 

12

 

6.3          Exercise Loans by Subsidiaries

 

Where a Participant is employed by a Subsidiary the
Exercise Loan may, at the discretion of the Board, be offered to that
Participant, and made, by that Subsidiary.

 

7.             RESTRICTION ON TRANSFER OF LOAN SHARES

 

7.1          No sale or dealing

 

Other than as provided by these Rules, a Participant must not sell,
encumber or otherwise deal with a Loan Share prior to the repayment of the
Exercise Loan used to acquire that Loan Share.

 

7.2          No transfer

 

Other than as provided by these Rules, the Company must not register or
permit the Share Registry to register a transfer of a Loan Share until the
Exercise Loan used to acquire that Loan Share has been repaid and for that
purpose the Company may do such things and enter into such arrangements with
the Share Registry or otherwise as it considers necessary to enforce such
restrictions on the transfer of a Loan Share and Participants will be bound by
such arrangements.

 

7.3          Sale of Loan Shares

 

A Participant who holds a Loan Share may request the Company to sell
that Loan Share on behalf of the Participant and apply the proceeds in or
towards the repayment of the Exercise Loan used to acquire that Loan
Share.  The Company will sell such Loan
Shares and will upon any such sale apply the proceeds in or towards repayment
of the Exercise Loan (if any) and Option Loan (if any).

 

8.             FORFEITURE

 

8.1          Board determination

 

If the Board determines that a Participant has committed any act of
fraud or defalcation or gross misconduct in relation to the affairs of the
Company or a Subsidiary or such other entity as referred to in Rule 3.2(e)(ii),
the Participant shall forfeit any right or interest in the Shares or other
entitlements of the Participant under the Plan.

 

13

 

8.2          Dealing in forfeited Shares

 

The Board in its absolute discretion may determine that forfeited
Shares are to be sold, transferred or otherwise disposed of and how any
proceeds therefrom are to be applied.

 

8.3          Dealing in rights of forfeited Shares

 

Pending a determination under Rule 8.2, the Board shall have the
absolute discretion as to how any rights or entitlements of such Shares as
referred to in Rule 4.8 are to be dealt with.

 

8.4          Participant to have no rights to proceeds

 

A Participant shall have no rights to the proceeds from any forfeited
Shares dealt with under Rule 8.2 and releases and shall hold harmless the
Company in respect of any claim in respect thereof.

 

8.5          Appointment as attorney

 

For the purposes of Rule 8, each Participant authorises and appoints
the company secretary of the Company (or his delegate) as the agent and
attorney of the Participant to do all things necessary to give effect thereto
in the Participant’s name and on the Participant’s behalf including signing
share transfers and shall indemnify the company secretary (or his delegate) and
the Company in respect thereof.

 

9.             RIGHTS ATTACHING TO LOAN SHARES

 

9.1          Dividends

 

Subject to Rule 6.2(f)(ii) and (iii), a Participant is entitled to all
dividends declared or paid on the Loan Shares held by the Participant.

 

9.2          Bonus Shares

 

(a)           A Participant is entitled to any Bonus Shares that accrue to Loan
Shares held by the Participant.

 

(b)           Upon allotment of the Bonus Shares to the Participant, the Bonus
Shares are deemed, for the purposes of the Plan, to be Loan Shares that were
allotted to the Participant at the time the Loan Shares to which the Bonus
Shares accrued were allotted to the Participant.

 

14

 

9.3          Rights

 

A Participant is entitled to any Rights which accrue to Loan Shares
held by the Participant and may sell those Rights or accept the Rights and
subscribe for the underlying securities or options in accordance with the terms
of their offer.

 

9.4          Participation in Dividend Reinvestment Plan

 

Unless otherwise determined by the Board, Loan Shares shall not
participate in a dividend reinvestment plan of the Company.

 

10.          LOAN NOT REPAID

 

10.1        Sale of Loan Shares

 

(a)           If the Participant has not repaid the outstanding amount of an
Exercise Loan (if any) or Option Loan (if any) at the end of the Exercise Loan
Period, the Company may, at its discretion, on behalf of the Participant, sell
the Loan Shares and apply the proceeds of sale in repayment of the Exercise
Loan and the Option Loan.

 

(b)           For the purpose of the sale of the Loan Shares pursuant to Rule
10.1(a) the Participant authorises the secretary of the Company (or his duly authorised
delegate) to sell the Loan Shares on behalf of the Participant and as his
attorney.

 

(c)           The Company and the secretary will have complete discretion in
respect of the sale of the Loan Shares under Rule 10.1(a) and will not be
liable to the Participant in respect of the timing of or price obtained on or
any other circumstances relating to such sale.

 

10.2        Sale Proceeds

 

If the Company sells the Loan Shares in accordance with Rule 10.1, the
proceeds of sale will be applied in the following order:

 

(a)           in payment of any costs and expenses of the sale incurred by the
Company; and

 

(b)           in reduction of the outstanding amount of the Exercise Loan (if any)
and the Option Loan (if any); and

 

(c)           the balance (if any) in payment to the Participant.

 

15

 

10.3        Attorney

 

The Participant, in consideration of the grant of the Option Loan or
the Exercise Loan, irrevocably appoints the person who from time to time
occupies the position of secretary of the Company (or his duly authorised
delegate) his attorney to complete and execute any documents including share
transfers and to do all acts or things in his name on his behalf which may be
convenient or necessary for the purpose of giving effect to the provisions of
this Rule and the Participant covenants that the Participant shall ratify and
confirm any act or thing done pursuant to this power and shall indemnify the
attorney (or his duly authorised delegate) in respect thereof.

 

11.          OVERRIDING RESTRICTIONS ON ISSUE AND EXERCISE

 

Notwithstanding any Rule or the terms of any Option, no Option may be
offered, granted or exercised and no Share may be issued under the Plan if to
do so:

 

(a)           would contravene the Corporations Law, the Listing Rules or any
other applicable law; or

 

(b)           would contravene the local laws or customs of an Employee’s country
of residence or in the opinion of the Board would require actions to comply
with those local laws or customs which are impractical.

 

12.          ADMINISTRATION OF THE PLAN

 

(a)           The Plan will be administered by the Board in accordance with these
Rules.  The Board may make regulations
for the operation of the Plan which are consistent with these Rules.

 

(b)           Any power or direction which is conferred on the Board by these
Rules may be exercised by the Board in the interests or for the benefit of the
Company, and the Board is not, in exercising any such power or discretion,
under any fiduciary or other obligation to any other person.

 

(c)           Any power or discretion which is conferred on the Board by these
Rules may be delegated by the Board for such period and upon such conditions as
the Board may determine to:

 

(i)            a committee consisting of
such Directors as the Board determines; or

 

(ii)           any one or more persons
selected by the Board.

 

16

 

(d)           Every exercise of discretion by the Board (or its delegate) and
every decision of the Board as to the interpretation, effect or application of
these Rules is final, conclusive, and binding.

 

13.          RIGHTS OF PARTICIPANTS

 

Nothing in these Rules:

 

(a)           confers on an Employee the right to receive any Options;

 

(b)           confers on a Participant the right to continue as an employee of the
Company or any Subsidiary;

 

(c)           affects any rights which the Company or a Subsidiary may have to
terminate the employment of any employee; or

 

(d)           may be used to increase damages in any action brought against the
Company or a Subsidiary in respect of any such termination.

 

14.          AMENDMENT OF THESE RULES

 

14.1        Amendments

 

Subject to the Listing Rules, the Company may at any time by written
instrument or by resolution of the Board, amend all or any of the provisions of
these Rules (including this Rule 14).

 

14.2        No Reduction of Rights

 

No amendment of the provisions of these Rules is to reduce the rights
of any Participant in respect of Options issued under the Plan prior to the
date of the amendment, other than an amendment introduced primarily:

 

(a)           for the purpose of complying with or conforming to present or future
State, Territory or Commonwealth legislation governing or regulating the
maintenance or operation of the Plan or like plans;

 

(b)           to correct any manifest error or mistake; or

 

(c)           to enable any subsidiary of
the Company to comply with the Corporations Law or the Listing Rules.

 

17

 

14.3        Retrospectivity

 

Subject to the above provisions of this Rule 14, any amendment made
pursuant to Rule 14.1 may be given such retrospective effect as is
specified in the written instrument or resolution by which the amendment is
made and amendments to these Rules, including the terms of Options, have the
effect of automatically amending the terms of issued but unexercised Options.

 

15.          SUSPENSION OR TERMINATION

 

The Board may at its absolute discretion suspend the operation of the
Plan or terminate the Plan, provided that such suspension or termination shall
not adversely affect or prejudice rights of Participants at the time of such
suspension or termination.

 

16.          NOTICES

 

16.1        Addresses

 

Any notice regarding Options granted under the Plan will be sent to the
address of the Participant as recorded in the Option register maintained by the
Company or its Share Registry.

 

16.2        Manner of giving notice

 

Notice may be given by the Company to Participants in the manner
prescribed by the articles of association of the Company for the giving of
notices to members of the Company and the relevant provisions of the
Constitution of the Company apply with all necessary modification to notices to
Participants.

 

17.          GOVERNING LAW

 

The Plan is governed by and shall be construed and take effect in
accordance with the laws of Victoria.

 

18

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