Document:

exv10w6

 

Exhibit
10.6

11 December 2006

Michael Aldridge

15 Lechmere Street New

Farm, QLD 4005

Dear Michael,

Re: Offer of employment with Peplin Operations USA, Inc.

We refer to our discussions with you in relation to the extent and expected development of
operations conducted by the Peplin group of companies in the United States of America and the
consequent need for senior management leadership based in the USA.

We confirm that you have agreed to relocate to the USA and to be employed by Peplin Operations USA,
Inc (‘the Company’)

The Company will assist with the relocation of you and your immediate family by arranging at its
cost, or reimbursing the reasonable costs of,

	 	•	 	one way business class air travel from Brisbane to the Bay Area
	 
	 	•	 	packing transportation and unpacking and any temporary necessary storage of
your furniture and household effects.
	 
	 	•	 	legal costs and application fees to obtain appropriate visas and employment
authorizations
	 
	 	•	 	meeting the agent’s and related costs of selling your personal residence in
Brisbane, and the city transfer duty you may pay on the purchase of a private
residence in the Bay Area.
	 
	 	•	 	meeting the net cost of disposing and replacing non-compatible electrical
appliances;

in addition, the Company will facilitate your family’s orientation into the Bay Area and arrange
at its cost temporary accommodation for you and your family in a furnished apartment (or similar
style accommodation) at a cost of up to one month’s Salary during which time you should make
arrangements for more permanent accommodation. Relocation arrangements can be discussed further
and agreed with the Company’s nominated representative in due course.

 

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11 December 2006

Definitions

In this letter, except to the extent the context otherwise requires:

‘Affiliate’ means any person or entity that is an affiliate as that term is defined in the
Securities Exchange Act of 1934, as amended

‘Board’
means the Board of Directors of Peplin Operations USA, Inc;

‘Commencement Date’ means 1 January 2007;

‘Confidential Information’ means the trade secrets and all other information regarding the
affairs of Peplin Limited and its subsidiaries which become known to you in circumstances where you
know or ought to know that the information is to be treated as confidential and includes, without
limitation:

	(a)	 	formulae, technical information, plans and product specifications;
	 
	(b)	 	business plans and forecasts;
	 
	(c)	 	financial records, reports, accounts and proposals;
	 
	(d)	 	quotations and tenders submitted or prepared for submission to customers or potential
customers;
	 
	(e)	 	customer lists, names of customers, contacts and terms of trade with customers;
	 
	(f)	 	supplier lists, names of supplier contacts and terms of trade with suppliers,

except where that Information is available to and known by the public otherwise than through your
wrongful acts.

‘Group’
means Peplin Limited and its subsidiaries ‘Group Company’ means any one of them.

‘Intellectual Property Right’ means an invention, discovery, secret process, trade mark, service
mark, copyright work, design, patent, know-how and any other intellectual property right throughout
the world which is:

	(a)	 	related to or connected with the business or a product or service of the Group; and
	 
	(b)	 	invented, created, produced or conceived by you (whether alone or jointly with another
person) in the course of your employment.

‘Remuneration’ means the salary, options, short-term incentive, long-term incentive and other
benefits referred to in this letter.

‘Salary’ means the annual cash component of the remuneration package referred to in this letter.

 

 

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11 December 2006

‘Termination Date’ means:

	(a)	 	if you work out any notice period, your last day of employment;
	 
	(b)	 	if Peplin Operations USA, Inc. makes a payment in lieu of notice, the date upon which the
payment is made.
	 
	1.	 	Employment
	 
	1.1	 	You will be an “at will employee” of the Company. This means that either you or the Company
may terminate your employment at any time, for any reason or no reason, with or without cause
or notice. Regular employment with the Company is for no specified period of time and the
Company makes no guarantee or contract of continued employment. Although your job duties,
title, compensation and benefits, as well as the Company’s personnel policies, may change from
time to time, the “at will” nature of your employment may not be changed except in an express
written agreement signed by you and the Board.
	 
	1.2	 	In the case of a change of control of the Group following which you are not offered a
continuing position of equivalent responsibility, the Company will offer you payment in lieu
of notice of 12 months Salary. Otherwise and subject to Article 1.3, if either you or the
Company decides to terminate your employment with the Company without
cause, in the period
prior to 31 December 2007, 12 months prior written notice of termination must be given by the
party seeking to terminate, thereafter the notice period is 6 months.
	 
	1.3	 	In the event the Company decides to terminate your employment without cause, the Company may
terminate your employment immediately provided that it makes payment in lieu of the notice
period referred to in Article 1.2. The Board may increase the amount of notice and payment in
lieu given by it, in its sole and absolute discretion. The Company may terminate your
employment immediately with no further remuneration other than statutory entitlements if you:

	 	(a)	 	engage in misconduct;
	 
	 	(b)	 	commit a willful breach of or willfully neglect to perform or observe any
of your obligations under this letter;
	 
	 	(c)	 	fail to observe or perform any of the duties or obligations imposed on you
under your conditions of employment and do not correct such failure within 7 days of
being instructed to do so in writing by the Company;
	 
	 	(d)	 	are convicted of or plead nolo contender to any felony or crime of moral turpitude; or
	 
	 	(e)	 	refuse to carry out the lawful directions of the Board.

	2.	 	Employment details
	 
	2.1	 	Attached to this letter is Schedule 1. Schedule 1 sets out your current:

 

 

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11 December 2006

	 	(a)	 	commencement date;
	 
	 	(b)	 	workplace;
	 
	 	(c)	 	salary;
	 
	 	(d)	 	medical and other benefit plans;
	 
	 	(e)	 	leave entitlements;
	 
	 	(f)	 	manner of salary payment; and
	 
	 	(g)	 	any other benefit that may be applicable to your employment.

	2.2	 	To the extent that a matter is not addressed in this offer of employment, your engagement is
governed by detailed policies applying from time to time to the conditions of staff employment,
currently set out in the Company’s Policies and Procedures, copies of which are available for your
inspection. The Company’s Policies and Procedures may be amended, supplemented or discontinued from
time to time at the Company’s sole and absolute discretion.
	 
	3.	 	Place of work
	 
	3.1	 	Your place of work is listed in Schedule 1. You acknowledge however that you may, from time to
time, be requested to work temporarily at locations other than the place of work listed in Schedule
1. You will also be required to travel nationally and internationally as part of your duties.
	 
	4.	 	Hours of work
	 
	4.1	 	From time to time you may be required to work outside your normal hours of work in order to
meet our business needs and your individual objectives. The expectation that your work hours will
vary has been taken into consideration when determining your salary.
	 
	5.	 	Remuneration and performance
	 
	5.1	 	Your salary and performance will be reviewed at least annually. There is no guarantee of an
increase in your salary at each review, but your salary will not be decreased.
	 
	5.2	 	The Company shall reimburse or meet the reasonable cost of 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.

 

 

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11 December 2006

	5.3	 	You may elect certain benefits from time to time at your own expense. In the event you do so,
you authorize the Company to deduct the expense from your regular pay.
	 
	6.	 	Bonuses and incentives
	 
	 	 	Options
	 
	6.1	 	In August 2006 you received a grant of 1,000,000 options as a one-off adjustment allocation
of options in Peplin Ltd to more reasonably align your option package with those of recent
employees based in the USA. Subject to the terms and conditions of the option plan under which
they were granted and the option agreement, including the requirement of your continuing
employment with the Company these options will vest in three annual tranches of 333,000. 333,000
and 334,000 with the first vesting as at 1 January 2007. These options have a strike price of 70
cents. These options are in addition to options package previously provided to you by Peplin Ltd.
	 
	 	 	STI and LTI
	 
	6.2	 	You shall, in addition to the salary detailed in the Schedule 1, be eligible to participate in
annual short term incentive (“STI”) and long term incentive (“LTI”) arrangements based upon a
complete year in your position as follows:

	 	(a)	 	Up to thirty per cent (30%) of your salary will be available as a maximum incentive on the
achievement of individual, team and Company goals agreed by you and the Board. In broad terms,
this bonus element will be apportionable over these goals in the ratio 50:25:25. Your maximum STI
for 2007 is 30% x $300,000 = $90,000.
	 
	 	(b)	 	From time to time as determined by the Board, an additional LTI 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 shares, performance rights or options in Peplin Ltd at a determination
point or points in the future. The Board of Peplin Ltd reserves the right to allocate options as
LTI to you on an annual basis with a target of 3.5 times annual STI value.

	 	 	Vacation entitlements
	 
	6.3	 	You will be entitled to 20 days vacation per year to be taken at a time mutually
agreeable to you and the Company. In addition, you will receive 8 paid public holidays per year
together with 2 floating holidays.
	 
	6.4	 	You may not accrue more than 30 days of accrued, unused vacation time. In the event you accrue
30 days of unused vacation time, you will not accrue further vacation time until you have used
some of the accrued, unused vacation time.
	 
	6.5	 	Accrued, unused vacation time is paid upon termination of employment.

 

 

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11 December 2006

	7.	 	Sick/carer’s leave
	 
	7.1	 	You are entitled to 10 days paid sick leave in any year. Sick leave entitlements are
cumulative.
	 
	7.2	 	Unused sick leave is not paid out upon termination of employment.
	 
	7.3	 	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.
	 
	7.4	 	You are entitled to family and medical care leave in accordance with US federal and California
state law as in effect from time to time.
	 
	8.	 	Long service leave
	 
	8.1	 	You will continue to be entitled to long service Leave calculated in accordance with the
Industrial Relations Act 1999 (Old) and your service in Australia and in the USA will be counted
for this purpose.
	 
	9.	 	Your duties
	 
	9.1	 	The duties of your position are set out in Schedule 2 and include those advised by us from
time to time.
	 
	9.2	 	While employed by us, you are expected to devote your full working time and attention to the
Peplin Group, and you will not:

	 	(a)	 	perform your duties other than for us or on our behalf; or

	 	(b)	 	engage in any other employment, business or profession, without written permission.

	9.3	 	You will at all times act in the best interests of the
Group’s business. You must comply with
all lawful and reasonable directions we give you.
	 
	9.4	 	You will not accept any payment or other benefit from any person as an inducement or reward for
any act or forbearance in connection with any matter or business transacted by us or on our behalf.
You must disclose to us any of your interests which may compete or conflict with our interests.
	 
	10.	 	When your employment ends
	 
	 	 	On termination, you will immediately return all property belonging to us, including any
Confidential Information, documents, records, computer disks, keys and any
other property.

 

 

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11 December 2006

	11.	 	Non-Solicitation
	 
	11.1	 	In consideration of your employment and to protect our goodwill, you agree that you will not
in any capacity, directly or indirectly whilst employed by the Company or afterwards, for a period
of 12 months, solicit or entice or endeavour to solicit or entice from the Company or its
Affiliates any director, manager officer, employee, servant or contractor of the Company or its
Affiliates because of their expertise and with whom you have had direct contact in the 12 months
preceding termination of your employment.
	 
	11.2	 	In consideration of your employment and to protect our goodwill, you agree that you will not
in any capacity, directly or indirectly whilst employed by the Company solicit or entice or
endeavour to solicit or entice any customer, supplier, distributor or licensee of the Company
with whom you have had contact, during the 12 months preceding termination of your employment to
terminate or reduce their business with the Company or its Affiliates or to do business with
yourself or any other person or entity.
	 
	11.3	 	In consideration of your employment and to protect our goodwill, trade secrets, Confidential
Information and Intellectual Property Rights, you agree that you will not in any capacity,
directly or indirectly whilst employed by the Company or thereafter use any trade secret
information or other Intellectual Property Rights of the Company or its Affiliates to solicit or
entice or endeavor to solicit or entice any customer, supplier, distributor or licensee of the
Company with whom you have had contact to terminate or reduce their business with the Company or
its Affiliates or to do business with yourself or any other person or entity
	 
	11.4	 	The validity of each separate restraint will not be affected by the invalidity, if any, of
any other restraint.
	 
	11.5	 	You may seek the Company’s consent in writing to be released from any restraint contained in
this article 11.
	 
	12.	 	Policies
	 
	12.1	 	To help our business operate lawfully, safely and efficiently, we have policies and procedures
which set out various rights, obligations duties and procedures relevant to your employment. You
will be expected to comply with these policies and procedures. Serious breaches of our policies and
procedures could result in termination of your employment.
	 
	12.2	 	To meet the changing environment in which we operate, it will be necessary to change these
policies and procedures from time to time. You will be given notice of the changes and will be
required to follow the changed policies and procedures.
	 
	13.	 	Intellectual property rights

 

 

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11 December 2006

	 	 	Ownership
	 
	13.1	 	All your interests in the Intellectual Property Rights become the property of the
Company as beneficial owner without further payment to you as provided for in this letter.
	 
	 	 	Disclosure
	 
	13.2	 	You must disclose to the Company, any Intellectual Property Right promptly after
it is brought into existence.
	 
	 	 	Assistance by you
	 
	13.3	 	You must at the expense of the Company, execute all documents and do all
other things reasonably necessary to:

	 	(a)	 	enable the Company or its nominee to obtain letters patent, design
registration or other official protection for your interest in each of its Intellectual Property
Rights, and
	 
	 	(b)	 	transfer to the Company or its nominee, the full ownership of each of its Intellectual Property Rights.

	 	 	Power of attorney
	 
	13.4	 	You irrevocably appoint the Company to be your attorney and in your name and
on your behalf and as your act and deed to:

	 	(a)	 	execute all documents; and
	 
	 	(b)	 	do and perform any or all other acts, matters or things,

	 	 	necessary to give the Company the full benefit of its Intellectual Property Rights.
	 
	 	 	Moral rights
	 
	13.5	 	Employee expressly acknowledges that all copyrightable works are to be
considered “works made for hire” within the meaning of the Copyright Act of 1976, as amended (the
“Act”), and that Employer is to be the “author” within the meaning of such Act for all purposes.
All such copyrightable works, as well as all copies of such works in whatever medium fixed or
embodied, shall be owned exclusively by Employer as of its creation, and Employee hereby expressly
disclaims any and all interest in any of such copyrightable works and waives any right of droit
morale or similar rights.
	 
	 	 	Continuing obligations
	 
	13.6	 	Your obligations relating to intellectual property rights continue after the
termination of your employment.

 

 

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11 December 2006

	14.	 	Confidential information
	 
	 	 	Maintenance of confidentiality
	 
	14.1	 	You must keep confidential all Confidential Information and use your best
endeavours to prevent the disclosure of Confidential Information to any person except:

	 	(a)	 	as required by law;
	 
	 	(b)	 	with the prior written consent of the Company, or
	 
	 	(c)	 	in the proper performance of your duties to the Company’s agents,
employees or advisors who enter into an undertaking of confidentiality reasonably required by the
Company.

	14.2	 	You must not make a copy or other record of Confidential Information except in
the proper performance of your duties.
	 
	14.3	 	You acknowledge that harm may be caused to the Company by unauthorized
disclosure of Confidential Information.
	 
	 	 	Use during and after employment
	 
	14.4	 	You must not either during employment or after termination of employment, use
Confidential Information for a purpose other than for the benefit of the Company or an Affiliate.
	 
	15.	 	Interpretation
	 
	15.1	 	If any term of your contract of employment is found to be or becomes
unenforceable or contrary to law, it will be severed and this will not in any way affect the
enforceability of the remaining terms.
	 
	15.2	 	The formation, construction, and performance of this Agreement shall be
construed in accordance with the laws of California.
	 
	15.3	 	You and the Company agree that, if a dispute arises concerning or relating to
your employment with the Company, the dispute shall be submitted to binding arbitration pursuant to
the Federal Arbitration Act using the rules for the resolution of employment disputes of the
American Arbitration Association then in effect. The arbitration shall take place in San Francisco
County, California, and both you and the Company agree to submit to the jurisdiction of the
arbitrator selected in accordance with American Arbitration Association (“AAA”) rules and
procedures. Any arbitration under this Article shall be conducted in accordance with the AAA rules
and procedures then applicable to employment disputes except as otherwise specified in this
Article, and shall provide for reasonable discovery. The cost of any arbitration under this Article
shall be born equally by the parties; provided, however, to the extent any costs are unique to
arbitration

 

   

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11 December 2006

	 	 	 	and/or would exceed the costs you would incur in a court of competent jurisdiction, those costs
shall be born by the Company. Except as set forth in this Article, you and the Company agree that
this arbitration procedure will be the exclusive means of redress for any disputes relating to or
arising from your employment with the Company, including disputes over rights provided by federal,
state, or local statutes, regulations, ordinances, and common law, including all laws that prohibit
discrimination based on any protected classification. The parties expressly waive the right to a
jury trial, and agree that the arbitrator’s award shall be rendered in writing, final and binding
on both parties, and nonappealable. The arbitrator shall have discretion to award monetary and
other damages, or to award no damages and to fashion any other relief the arbitrator deems
appropriate. The parties shall each bear their own attorney’s fees, provided however, that the
arbitrator shall have discretion to award the prevailing party reasonable costs and attorney fees
to the extent authorized by applicable law.

	15.4	 	Any amendment to this agreement is not binding unless agreed between you and the Company and
recorded in writing.
	 
	15.5.	 	This letter is the entire agreement and understanding between you and the Company on
everything connected with your employment.
	 
	15.6	 	Any prior agreement or understanding on anything connected with your employment is
superseded by this letter.
	 
	16.	 	Obligations owed to Affiliates
	 
	16.1	 	Throughout this letter are references to ‘we’,
‘us’, ‘our business’, ‘our
goodwill’,‘our
employees’ and our ‘customers, clients or suppliers’. These references are references to the Company
but also to the Group, so that your duties and obligations set out in the following Articles of
this letter apply to the Company and the Group.

	 	(a)	 	Article 11 — Protection of our goodwill.
	 
	 	(b)	 	Article 12 — Policies.
	 
	 	(c)	 	Article 13 — Intellectual property.
	 
	 	(d)	 	Article 14 — Confidential Information.

Please confirm your acceptance of the terms of your employment by signing and returning this copy.
You should retain a copy for your records.

 

 

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11
December 2006

You acknowledge that you have been given the opportunity by us to seek independent advice prior to
entering into this agreement.

Yours sincerely,

	 	 	 	 	 
	 	/s/ Cherrell Hirst
 	 
	 	Cherrell Hirst for and on behalf of Peplin Operations USA, Inc. 	 
	 	 	 
	 

I, Michael Aldridge accept that the contents of this letter represent the terms of my employment.

	 	 	 	 	 	 	 	 	 
	/s/ Michael Aldridge

	 	 	 	Date:	 	11/Dec/06	 	 
	 

Michael Aldridge

	 	 	 	 	 	 

	 	 

 

 

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11 December 2006

SCHEDULE 1

	 	 	 
	Employer:

	 	Peplin Operations USA, Inc.
	 
	 	 
	Employee’s
full name:

	 	Michael Aldridge
	 
	 	 
	Date
of agreement:

	 	11 December 2006 
	 
	 	 
	Date of
commencement:

	 	1 January 2007 
	 
	 	 
	Workplace:

	 	San Francisco Bay Area
	 
	 	 
	Remuneration:

	 	Salary at an annual rate of US$300,000 
	 
	 	 
	Manner
of salary payment:

	 	Bi monthly in arrears, into an account nominated by you
	 
	 	 
	Benefit
plans:

	 	Employee, employee’s dependents and domestic partner
shall be entitled to participate in all medical
benefit plans, including dental and vision plans, when
and as such plans are implemented and generally made
available to officers of the Company. In addition
employee will receive life insurance, short-term
disability, long-term disability, and accidental death
or dismemberment coverage at no cost and may
participate in 401(k), savings and investment plans
and flexible spending accounts if they are made
available. Please refer to the Company’s policies and
procedures for further information on such plans.
	 
	 	 
	Cell
phone and home internet:

	 	Employee will be provided with a cell phone, at no
cost to Employee, to be used for Company related
calls.
	 
	 	 
	 

	 	Employee will be provided with costs (service fees
taxes and calls) of one land line at place of
residence given that this line is used only for Peplin
company purposes.
	 
	 	 
	 

	 	Employee will be entitled to claim reimbursement of
the cost of installing and maintaining internet access
at your

 

 

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11 December 2006

	 	 	 
	 

	 	home
	 
	 	 
	Other
Benefits:

	 	Other than as set forth in this Schedule 1 and
the accompanying offer letter, there are no other
benefits.
	 
	 	 
	Paid
leave entitlements:

	 	Paid leave entitlements shall be as set forth in
the accompanying offer letter.

 

 

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11 December 2006

SCHEDULE 2

Position Description

Your
position is Chief Executive Officer and Managing Director of the Group. In this role, you have
accountability as:

	 	(a)	 	A director of all Group companies
	 
	 	(b)	 	Responsible for the execution of the strategic plan developed by the Board of Peplin Limited
	 
	 	(c)	 	Oversight of the General Manager in Australia.exv10w7

 

Exhibit 10.7

September 8 2006

Philip Moody

918 Arlington Avenue

Berkley CA 94707

Dear Philip,

Offer of employment, Chief Financial Officer, Vice President Finance and Operations

We are pleased to offer you employment in the role of Chief Financial Officer of Peplin Limited
(“Peplin”) and Peplin Operations USA, Inc. (the “Company”) based in the San Francisco Bay Area and
reporting to the CEO of Peplin at a starting salary of $280,000 per annum. You will be an officer
of Peplin and its subsidiaries and have accountability principally for all financial reporting,
risk management and regulatory reporting and compliance activities of Peplin and its subsidiaries,
either directly or through Peplin’s company secretary who will be a direct report to you. In this
role you will sit on the Peplin’s executive management committee.

Employment

	1.1	 	You will be an “at will employee” of the Company. This means that either you or the Company
may terminate your employment at any time, for any reason or no reason, with or without cause
or notice. Regular employment at Peplin Operations USA, Inc. is for no specified period of
time and the Company makes no guarantee or contract of continued employment. Although your
job duties, title, compensation and benefits, as well as the Company’s personnel policies, may
change from time to time, the “at will” nature of your employment may not be changed except in
an express written agreement signed by you and the CEO of Peplin Limited.
	 
	1.2	 	Prior to February 6 2007 and subject to Article 1.3, if either you or the Company decides to
terminate your employment with the Company without cause, 3 months prior written notice of
termination must be given by the party seeking to terminate, after February 6 2007 the
relevant notice period will be 6 months.
	 
	1.3	 	In the event the Company decides to terminate your employment without cause, the Company may
terminate your employment immediately provided that it makes payment in lieu of the notice
period referred to in Article 1.2.

 

2

	1.4	 	Prior to December 31 2007 the Company will review its policy with regard to notice periods
(on a change of control) for its relevant senior executives with reference to prevailing US
market practice for comparable companies (in terms of their activities, size and structure).
	 
	1.5	 	The Company may terminate your employment immediately if you:

	 	(a)	 	engage in misconduct;
	 
	 	(b)	 	commit a willful breach of or willfully neglect to perform or observe any of
your obligations under this letter;
	 
	 	(c)	 	fail to observe or perform any of the duties or obligations imposed on you
under your conditions of employment and do not correct such failure within 7 days of
being instructed to do so in writing by the Company;
	 
	 	(d)	 	are convicted of or plead nolo contender to any felony or crime of moral
turpitude; or
	 
	 	(e)	 	refuse to carry out the lawful directions of a superior.

	2.	 	Employment details
	 
	2.1	 	Attached to this letter is Schedule 1. Schedule 1 sets out your current:

	 	(a)	 	commencement date;
	 
	 	(b)	 	workplace;
	 
	 	(c)	 	salary;
	 
	 	(d)	 	medical and other benefit plans;
	 
	 	(e)	 	leave entitlements;
	 
	 	(f)	 	manner of salary payment; and
	 
	 	(g)	 	any other benefit that may be applicable to your employment.

	2.2	 	To the extent that a matter is not addressed in this offer of employment, your engagement is
governed by detailed policies applying from time to time to the conditions of staff
employment, currently set out in the Company’s Policies and Procedures, copies of which are
available for your inspection.
	 
	3.	 	Place of work
	 
	3.1	 	Your place of work is listed in Schedule 1. You acknowledge however that you may, from time
to time, be requested to work temporarily at locations other than the place of work listed in
Schedule 1. You will also be required to travel nationally and internationally as part of
your duties.
	 
	4.	 	Hours of work
	 
	4.1	 	From time to time you may be required to work outside your normal hours of work in order to
meet our business needs and your individual objectives. The expectation
that your work hours will vary has been taken into consideration when determining your
salary.

 

3

	5.	 	Remuneration and performance
	 
	5.1	 	Your salary and performance will be reviewed regularly. There is no guarantee of an increase
in your salary at each review.
	 
	5.2	 	The Company shall reimburse or meet the reasonable cost of 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.
	 
	5.3	 	You may elect certain benefits from time to time at your own expense. In the event you do
so, you authorize the Company to deduct the expense from your regular pay.
	 
	6.	 	Bonuses and incentives
	 
	 	 	Options
	 
	6.1	 	You will receive, subject to Peplin Ltd board approval, 1,800,000 one-off ‘sign-on’
options in Peplin Ltd. Subject to your continuing employment with Peplin these options will
vest in three annual tranches of 600,000, 600,000 and 600,000 with the first vesting as at 1
January 2007. These options will have a strike price equal to the average of the closing
share price of Peplin Ltd shares as quoted on the Australian Stock Exchange over the five
trading days preceding the date of grant and an expiration date of 31 December 2011.
	 
	 	 	STI and LTI
	 
	6.2	 	You shall, in addition to the salary detailed in the Schedule 1, be eligible to
participate in annual short term incentive (“STI”) and long term incentive (“LTI”)
arrangements based upon a complete year in your position as follows:

	 	(a)	 	Up to thirty per cent (30%) of your salary will be available as a maximum
incentive on the achievement of individual, team and Company goals agreed by you and
the CEO. In broad terms, this bonus element will be apportionable over these goals in
the ratio 50:25:25. Your maximum STI for 2006 is 30% x $280,000 = $84,000, pro-rata for
the period of your commencement through to December 31, 2006.
	 
	 	(b)	 	From time to time as determined by the Board of Peplin Limited, an additional
LTI 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 shares, performance
rights or options in Peplin Limited 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 Limited. Peplin Operations USA’s policy in this respect is that target LTI’s
in general should be twice the annual STI.

	7.	 	Vacation entitlements
	 
	7.1	 	You will be entitled to 20 days vacation per year to be taken at a time mutually agreeable to
you and the Company. In addition, you will receive 8 paid public holidays per year together
with 2 floating holidays.

 

4

	7.2	 	You may not accrue more than 30 days of accrued, unused vacation time. In the event you
accrue 30 days of unused vacation time, you will not accrue further vacation time until you
have used some of the accrued, unused vacation time.
	 
	7.3	 	Accrued, unused vacation time is paid upon termination of employment.
	 
	8.	 	Sick/carer’s leave
	 
	8.1	 	You are entitled to 10 days paid sick leave in any year. Sick leave entitlements are
cumulative.
	 
	8.2	 	Sick leave is not paid out upon termination of employment.
	 
	8.3	 	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.
	 
	8.4	 	You are entitled to family and medical care leave in accordance with US federal and
California state law as in effect from time to time.
	 
	9.	 	Your duties
	 
	9.1	 	The duties of your position are set out in Schedule 2 and include those advised by us from
time to time.
	 
	9.2	 	While employed by us, you are expected to devote your full working time and attention to us,
and you will not:

	 	(a)	 	perform your duties other than for us or on our behalf; or
	 
	 	(b)	 	engage in any other employment, business or profession, without written
permission.

	9.3	 	You will at all times act in the best interests of our business. You must comply with all
lawful and reasonable directions we give you.
	 
	9.4	 	You will not accept any payment or other benefit from any person as an inducement or reward
for any act or forbearance in connection with any matter or business transacted by us or on
our behalf. You must disclose to us any of your interests which may compete or conflict with
our interests.
	 
	10.	 	When your employment ends
	 
	 	 	On termination, you will immediately return all property belonging to us, including any
Confidential Information, documents, records, computer disks, keys and any other property.
	 
	11.	 	Protection of our goodwill
	 
	11.1	 	In consideration of your employment and to protect our goodwill, you agree that you will not
in any capacity, directly or indirectly:

	 	(a)	 	for the period of employment and for a period of 6 months after termination of
employment, solicit or entice or endeavor to solicit or entice, any director, manager,
officer, employee, or contractor of ours to terminate his or her

 

5

	 	 	 	relationship with us or become employed by or a contractor to any other person or
entity; or
	 
	 	(b)	 	for the period of employment and any time thereafter, use any of the Company’s
Confidential Information, as defined in section 12 below, belonging to us to:

	 	•	 	solicit or entice or endeavor to solicit or entice from us using any trade
secret of the company, the business of any person who, during your employment,
has been a customer, supplier, distributor or licensee of ours, and who you
have had dealings with in the 12 months prior to termination;
	 
	 	•	 	solicit or persuade using any trade secret of the company any person who has
dealt with us during the term of your employment, or is in the process of
negotiating with us at the date of termination or completion of this Agreement,
to cease doing business with us; or
	 
	 	•	 	solicit or entice using any trade secret of the company or endeavor to
solicit or entice any person to do business with yourself or any other person
or entity.

	11.2	 	You acknowledge that any of the activities described in 11.1(a) or 11.1(b) is unfair
competition. Article 11.1 will have a cumulative effect of several separate restraints for
each activity listed in 11.1(a) and 11.1(b). All possible combinations must be complied with.
	 
	11.3	 	The validity of each separate restraint will not be affected by the invalidity, if any, of
any other restraint.
	 
	11.4	 	You may seek our consent in writing to be released from any restraint contained in this
Article 11.
	 
	12.	 	Policies
	 
	12.1	 	To help our business operate lawfully, safely and efficiently, we have policies and
procedures (including but not limited to those referred to at Articles 13 and 14 below) which
set out various rights, obligations duties and procedures relevant to your employment. You
will be expected to comply with these policies and procedures. Serious breaches of our
policies and procedures could result in termination of your employment.
	 
	12.2	 	To meet the changing environment in which we operate, it will be necessary to change these
policies and procedures from time to time. You will be given notice of the changes and will
be required to follow the changed policies and procedures.
	 
	13.	 	Intellectual property
	 
	 	 	You must comply with the Company’s policy on intellectual property.
	 
	14.	 	Confidential information
	 
	 	 	You must comply with the Company’s policy on confidential information.
	 
	15.	 	Interpretation

 

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	15.1	 	If any term of your contract of employment is found to be or becomes unenforceable or
contrary to law, it will be severed and this will not in any way affect the enforceability of
the remaining terms.
	 
	15.2	 	The formation, construction, and performance of this Agreement shall be construed in
accordance with the laws of California.
	 
	15.3	 	You and the Company agree that, if a dispute arises concerning or relating to your employment
with the Company, the dispute shall be submitted to binding arbitration pursuant to the
Federal Arbitration Act using the rules for the resolution of employment disputes of the
American Arbitration Association then in effect. The arbitration shall take place in San
Francisco County, California, and both you and the Company agree to submit to the jurisdiction
of the arbitrator selected in accordance with American Arbitration Association (“AAA”) rules
and procedures. Any arbitration under this Article shall be conducted in accordance with the
AAA rules and procedures then applicable to employment disputes except as otherwise specified
in this Article, and shall provide for reasonable discovery. The cost of any arbitration
under this Article shall be born equally by the parties; provided, however, to the extent any
costs are unique to arbitration and/or would exceed the costs you would incur in a court of
competent jurisdiction, those costs shall be born by the Company. Except as set forth in this
Article, you and the Company agree that this arbitration procedure will be the exclusive means
of redress for any disputes relating to or arising from your employment with the Company,
including disputes over rights provided by federal, state, or local statutes, regulations,
ordinances, and common law, including all laws that prohibit discrimination based on any
protected classification. The parties expressly waive the right to a jury trial, and agree
that the arbitrator’s award shall be rendered in writing, final and binding on both parties,
and nonappealable. The arbitrator shall have discretion to award monetary and other damages,
or to award no damages, and to fashion any other relief the arbitrator deems appropriate. The
parties shall each bear their own attorney’s fees, provided however, that the arbitrator shall
have discretion to award the prevailing party reasonable costs and attorney fees to the extent
authorized by applicable law.
	 
	15.4	 	Subject to our right to amend our policies and procedures and change your duties, any
amendment to this agreement is not binding unless agreed between you and the Company and
recorded in writing.
	 
	15.5	 	This letter together with our policies and procedures is the entire agreement and
understanding between you and the Company on everything connected with your employment.
	 
	15.6	 	Any prior agreement or understanding on anything connected with your employment is superseded
by this letter.
	 
	16.	 	Obligations owed to related entities bodies corporate
	 
	16.1	 	Throughout this letter are references to ‘we’, ‘us’, ‘our business’, ‘our goodwill’, ‘our
employees’ and ‘our customers, clients or suppliers’. These references are references not
only to Peplin Operations USA, Inc. but also to any of our affiliates, so that your duties and
obligations set out in the following Articles of this letter apply not only to Peplin
Operations USA, Inc. but also to our affiliates:

	 	(a)	 	Article 11 – Protection of our goodwill.
	 
	 	(b)	 	Article 12 – Policies.

 

7

	 	(c)	 	Article 13 – Intellectual property.
	 
	 	(d)	 	Article 14 – Confidential Information.

Please confirm your acceptance of the terms of your employment by signing and returning this copy.
You should retain a copy for your records.

You acknowledge that you have been given the opportunity by us to seek independent advice prior to
entering into this agreement.

Yours sincerely,

	 	 	 
	/s/
Michael Aldridge
	 	 
	 	 	 
	Michael Aldridge, President and Director, Peplin Operations USA, Inc.

I, Philip K. Moody, accept that the contents of this letter represent the terms of my employment.

	 	 	 
	/s/ Philip K. Moody

	 	Date: 09 / 08 / 06
	 

Philip K. Moody

	 	 

 

8

SCHEDULE 1

	 	 	 
	Employer:

	 	Peplin Operations USA, Inc.
	 
	 	 
	Employee’s full name:

	 	Philip K. Moody
	 
	 	 
	Date of agreement:

	 	8 September 2006
	 
	 	 
	Date of commencement:

	 	4 September 2006
	 
	 	 
	Workplace:

	 	San Francisco Bay Area
	 
	 	 
	Remuneration:

	 	US$280,000 base salary per annum
	 
	 	 
	Manner of salary
payment:

	 	Bi monthly in advance, into an account nominated by you
	 
	 	 
	Benefit plans:

	 	Employee, employee’s dependents and domestic partner
shall be entitled to participate in all medical
benefit plans, including dental and vision plans, when
and as such plans are implemented and generally made
available to officers of the Company. In addition
employee will receive life insurance, short-term
disability, long-term disability, and accidental death
or dismemberment coverage at no cost and may
participate in 401(k), savings and investment plans
and flexible spending accounts if they are made
available. Please refer to the Company’s policies and
procedures for further information on such plans.
	 
	 	 
	Cell phone and home
internet:

	 	Employee will be provided with a cell phone, at no
cost to Employee, to be used for Company related calls
or will be eligible to claim reimbursement for
reasonable Company related call costs from using
Employee’s personal cell phone.
	 
	 	 
	 

	 	Employee will be entitled to claim reimbursement of
the cost of installing and maintaining internet access
at your home
	 
	 	 
	Other Benefits:

	 	Other than as set forth in this Schedule 1 and the
accompanying offer letter, there are no other
benefits.
	 
	 	 
	Paid leave entitlements:

	 	Paid leave entitlements shall be as set forth in the
accompanying offer letter.

 

9

SCHEDULE 2

Position Description

Your position is ‘Chief Financial Officer, Vice President Finance and Operations’ based in the San
Francisco Bay Area and reporting to the Chief Executive Officer of Peplin Limited. In this role,
you have accountability for:

	 	(a)	 	You will be an officer of Peplin Limited and the Company and have accountability
principally for financial reporting, risk management and regulatory reporting and
compliance activities of Peplin and its subsidiaries, either directly or through Peplin’s
company secretary who will be a direct report to you.
	 
	 	(b)	 	You will sit on the Peplin’s executive management committee.
	 
	 	(c)	 	In addition you will be responsible for

	 	(i)	 	financial planning, budgeting and financial modeling
	 
	 	(ii)	 	capital resources and investor relations
	 
	 	(iii)	 	tax planning, tax reporting and tax filing both Australian and
international
	 
	 	(iv)	 	operations, administration and information systems, legal and
intellectual property functions
	 
	 	(v)	 	oversight of the secretarial function and board reporting

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