Document:

Exhibit 10.5

 

SERVICE AGREEMENT

 

 

DATED 1 July, 2004

 

 

CYCLACEL GROUP PLC

 

and

 

DR ROBERT JACKSON

 

 

 

London

 

 

CONTENTS

 

	
  Clause

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  1.

  	
  Interpretation

  	
   

  
	
  2.

  	
  Appointment
  and Duration

  	
   

  
	
  3.

  	
  Executive’s
  Duties

  	
   

  
	
  4.

  	
  Place
  of Performance

  	
   

  
	
  5.

  	
  Salary

  	
   

  
	
  6.

  	
  Bonus

  	
   

  
	
  7.

  	
  Expenses

  	
   

  
	
  8.

  	
  Car

  	
   

  
	
  9.

  	
  Pensions

  	
   

  
	
  10.

  	
  Insurances

  	
   

  
	
  11.

  	
  Medical
  and Sickness

  	
   

  
	
  12.

  	
  Holidays

  	
   

  
	
  13.

  	
  Confidential
  Information

  	
   

  
	
  14.

  	
  Gratuities

  	
   

  
	
  15.

  	
  Codes of
  Conduct

  	
   

  
	
  16.

  	
  Termination of Appointment

  	
   

  
	
  17.

  	
  Protective
  Covenants

  	
   

  
	
  18.

  	
  Intellectual
  Property

  	
   

  
	
  19.

  	
  Reconstructions

  	
   

  
	
  20.

  	
  General

  	
   

  
	
  21.

  	
  Governing Law

  	
   

  
	
  22.

  	
  Other Documents

  	
   

  
	
  23.

  	
  Third Party
  Rights

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule

  	
   

  
	
   

  	
   

  	
   

  
	
  1.

  	
  Statement of
  Employment Particulars

  	
   

  

 

 

THIS AGREEMENT is
made on 1 July, 2004

 

BETWEEN:

 

(1)           CYCLACEL GROUP PLC (registered number 5090795) whose registered
office is at 6-8 Underwood Street, London N1 7QJ (the Company); and

 

(2)           DR ROBERT JACKSON of 51 North Street, Whittlesford, Cambridge CB2
4NZ (the Executive).

 

IT IS AGREED as
follows:

 

1.             INTERPRETATION

 

1.1           In this agreement:

 

Associated Company means:

 

(a)           a company which is not a
Subsidiary of the Company but whose issued equity share capital (as defined in
section 744 of the Companies Act 1985) is owned as to at least 20 per cent. by
the Company or one of its Subsidiaries; and

 

(b)           a Subsidiary of a company
within (a) above;

 

Board means the directors of the Company present at a duly convened and
quorate meeting of the directors or of a committee of the directors duly
appointed for the purpose in question;

 

Commencement Date means the date of admission of the Company to the London Stock
Exchange;

 

Group means the Company, its Subsidiaries and Associated Companies for
the time being (including the Company), and Group Company means any one
of them;

 

Recognised Investment
Exchange means a relevant EEA market as
defined in, or a market established under, the rules of any investment exchange
specified in Schedule 3 to the Financial Services and Markets Act 2000
(Financial Promotion) Order 2001;

 

Subsidiary means a subsidiary within the meaning of section 736 of the
Companies Act 1985; and

 

Working Day means a day other than a Saturday, Sunday or bank or other public
holiday in England.

 

1.2           References in this agreement to a person include a body corporate
and an unincorporated association of persons, and references to a company
include any body corporate.

 

1.3           Any reference in this agreement to a statutory provision includes
any statutory modification or re-enactment of it for the time being in force.

 

1.4           Subclauses 1.1 to 1.3 above apply unless the contrary intention
appears.

 

1.5           The headings in this agreement do not affect its interpretation.

 

1.6           Where appropriate, references to the Executive include his personal
representatives.

 

1

 

1.7           The terms set out in the Schedule in accordance with the
requirements of the Employment Rights Act 1996 form part of this agreement.

 

2.             APPOINTMENT AND DURATION

 

2.1           The Company will continue to employ the Executive and the Executive
will continue to serve the Company as a full time Chief Scientific Officer of
the Company, or in such other capacity within the Group as the Company may from
time to time require, for the period and on the terms set out in this agreement
(the Appointment).

 

2.2           The Appointment shall commence on the Commencement Date and, unless
previously terminated in accordance with this agreement, will continue until
terminated by either party giving to the other party not less than six months’
notice in writing.  For the avoidance of
doubt, the Executive’s continuous employment is specified in the Schedule to
this agreement.

 

2.3           Unless previously terminated in accordance with this agreement, the
Appointment will automatically terminate at the end of the day on which the
Executive attains the age of 65.

 

3.             EXECUTIVE’S DUTIES

 

3.1           The Executive must use his best endeavours to promote and protect
the interests of the Group and must not do anything which is harmful to those
interests.  The Executive must
diligently and faithfully perform such duties and exercise such powers as may
from time to time be assigned to or vested in him in relation to the conduct
and management of the affairs of the Group by the Board.  The Executive must comply with all proper
instructions of the Board.

 

3.2           At any time during any period of notice of termination served in
accordance hereunder (whether given by the Company or the Executive), or where
the Company suspects that the Executive has committed any of the offences set
out in Clause 16.1 below, the Board may suspend all or any of the Executive’s
duties and powers for such periods and on such terms as it considers expedient
and this may include a term that the Executive must stay away from all or any
of the Company’s premises and/or will not be provided with any work and/or will
have no business contact with all or any of the Group’s agents, employees,
customers, clients, distributors and suppliers.  During any period of suspension the Appointment will continue and
the Executive will continue to be bound by his obligations under this
agreement.

 

3.3           The Executive must give to the Board such information regarding the
affairs of the Group as it shall reasonably require.

 

3.4           The Executive must (unless prevented by ill-health or accident or
otherwise directed by the Board) devote the whole of his time during normal
business hours to the duties of the Appointment and such additional time as is
necessary for the proper fulfilment of those duties.

 

3.5           The Executive must not accept any appointment to any office in
relation to any body, whether corporate or not (other than a Group Company) or
directly or indirectly be interested in any manner in any other business
except:

 

(a)           as holder or beneficial
owner (for investment purposes only) of any class of securities in a company if
those securities are listed or dealt in on a Recognised Investment Exchange and
if the Executive (together with his spouse, children, parents and parents’
issue) neither holds nor is beneficially interested in more than three per
cent. of the securities of that class; or

 

2

 

(b)           with the consent in writing
of the Company which shall not be unreasonably withheld but which may be given
subject to any terms which the Company requires.

 

3.6            The Executive must not resign as a director of the Company, except
at the request or direction of the Board.

 

4.             PLACE OF PERFORMANCE

 

4.1           The Executive’s normal place of work shall initially be the
Company’s premises in Dundee but the Company may from time to time require the
Executive to change his normal place of work to such other places within the
United Kingdom as it may decide.

 

4.2           The Executive may at the reasonable request of the Board be required
to travel aboard.

 

4.3           If the Company requires the Executive to relocate from the Dundee
area, it will reimburse the Executive for his reasonable removal and other
expenses, provided that the Executive has received the prior approval of the
Board to such expenses.

 

5.             SALARY

 

5.1           The Company will pay to the Executive a salary at the rate of
£137,173 per annum.  The salary will
accrue from day to day during the continuance of the Appointment and will be
payable by equal instalments in arrears on or about the 28th day of each
calendar month inclusive of any fees receivable by the Executive as a director
of any Group Company.

 

5.2           The Executive’s salary will be reviewed by the Company’s
Remuneration Committee at least once in every year.  The Company has no obligation to increase the Executive’s salary
and accordingly at the review the Company’s Remuneration Committee may in its
absolute discretion maintain the then existing level of salary or increase it
by an amount and subject to any terms as it may in its absolute discretion
decide.  The Company must not reduce the
Executive’s salary without his prior written consent.

 

6.             BONUS

 

The
Remuneration Committee of the Company may in its absolute discretion award to
the Executive an annual bonus to reflect his performance and the financial
performance of the Group.

 

7.             EXPENSES

 

The Company
will reimburse the Executive (on production of such evidence as it may reasonably
require) the amount of all travelling and other expenses properly and
reasonably incurred by him in the discharge of his duties.

 

8.             CAR

 

8.1           Subject to the Executive holding a current driving licence for motor
cars valid in the United Kingdom, the Company will provide the Executive with
an annual car allowance of £8,000, such allowance to be paid monthly, in
arrears.

 

8.2           The Executive must inform the Company immediately if he is
disqualified from holding a driving licence or if any other charges of driving
offences are made against the Executive and this Clause may not apply during
any period of disqualification.

 

3

 

9.                                      PENSIONS

 

The Executive
is eligible to participate in the Company’s Group Personal Pension Scheme (the Scheme)
subject to the rules of the Scheme as may be in force from time to time.  The terms of the Scheme provide for matched
individual contribution up to a maximum of six per cent. of salary, subject to
the maximum statutory allowance..

 

10.                               INSURANCES

 

10.1         The Executive is entitled to membership of the following schemes
(each referred to below as an insurance scheme):

 

(a)           a medical expenses
insurance scheme providing cover for the Executive (and his spouse and
dependent children under 18 years of age) as the Company may from time to time
notify to him;

 

(b)           a salary continuance on a
permanent health insurance scheme providing cover for the Executive as the
Company may from time to time notify to him; and

 

(c)           a life insurance scheme under
which a lump sum benefit shall be payable on the Executive’s death while the
Appointment continues; the benefit will be paid to such dependants of the
Executive or other beneficiary as the trustees of the scheme select at their
discretion, after considering any beneficiaries identified by the Executive in
any expression of his wishes delivered to the trustees before his death.  The benefit is equal to 2 times the
Executive’s basic annual salary at his death.

 

10.2         Benefits under any insurance scheme are subject to the rules of the
scheme and the terms of any applicable insurance policy and are conditional on
the Executive complying with and satisfying any applicable requirements of the
insurer.  Copies of these rules and
policies and particulars of the requirements (when notified to the Company)
will be provided to the Executive on request. 
The Company will not have any liability to pay any benefit to the
Executive under any insurance scheme unless it receives payment of the benefit
from the insurer.

 

10.3         Any insurance scheme which is provided for the Executive is also
subject to the Company’s right to alter the cover provided or any term of the
scheme or to cease to provide (without replacement) the scheme at any time if
in the reasonable opinion of the Board the state of health of the Executive is
or becomes such that the Company is unable to insure the benefits under the
scheme at the normal premiums applicable to a person of the Executive’s age.

 

10.4         The Company will indemnify you out of the assets of the Company
against any liability incurred by you in respect of any negligence, default,
breach of duty or breach of trust in relation to the Company provided that:

 

(i)            in defending any proceedings relating to the relevant liability
(whether civil or criminal) judgment is given in your favour or you are
acquitted; or

 

(ii)           the liability is in connection with any application under section
144(3) or (4) (acquisition of shares by innocent nominee) or section 727
(general power to grant relief in case of honest and reasonable conduct) of the
Companies Act 1985 in which relief is granted to you by the court.

 

10.5         During the Executive’s employment hereunder the Company will
maintain, for the benefit of the Executive, a policy of Directors and Officers
liability insurance.

 

4

 

11.                               MEDICAL AND SICKNESS

 

11.1         If the Executive is unable to come to work for any reason and his
absence has not previously been authorised by the Company the Executive must
inform the Company immediately and keep the Company informed.  The Executive must confirm the reasons for
his absence in writing as soon as practicable.

 

11.2         Following the Executive’s return to work after a period of absence
due to sickness or injury of seven calendar days or less he will be obliged to
complete a self-certification form. 
These forms will be retained by the Company for its records.

 

11.3         If the Executive is absent from work due to sickness or injury for
more than seven calendar days (including weekends) he must provide the Company
with a medical certificate by the eighth day of sickness or injury.  The Executive must provide medical
certificates to the Company to cover any further absence.

 

11.4         The Company may at any time require the Executive to be examined by
a medical adviser nominated by the Company. 
The Executive consents to the medical adviser disclosing the results of
the examination to the Company and will provide the Company with formal
consents as may be necessary for this purpose.

 

11.5         Provided the Executive complies with the requirements in Subclauses
11.1, 11.2 and 11.3 above, he will be paid his full basic salary during any
period of absence from work due to sickness or injury not exceeding 13 weeks in
any period of 36 consecutive months or due to one cause. No payment of salary
will be made in respect of any subsequent period of absence but, if the
Executive is eligible, benefits may be payable under the insurance scheme
referred to in Subclause 10.1(b).

 

11.6         The Executive’s salary during any period of absence due to sickness
or injury will be inclusive of any statutory sick pay to which he is entitled
and the Company may deduct from his salary the amount of any social security
benefits and any benefits under any insurance scheme referred to in Clause 10
that he may be entitled to receive.

 

11.7         If the Executive is incapable of performing his duties by reason of
injury sustained wholly or partly as a result of negligence, nuisance or breach
of any statutory duty on the part of a third party and the Executive recovers
an amount by way of compensation for loss of earnings from that third party, he
will pay to the Company a sum equal to the amount recovered or, if less, the
amount paid to him by the Company under Subclause 11.5 above in respect of
the relevant period of absence as a result of that injury.

 

12.                               HOLIDAYS

 

12.1         The Company’s holiday year runs from 1st January to 31st December (Holiday Year).  The Executive is entitled to 25 Working
Days’ holiday, plus such statutory or public holidays as the Company may
specify each year, with pay in every Holiday Year at times convenient to the
Company.

 

12.2         Any entitlement to holiday remaining at the end of a Holiday Year
will lapse except in exceptional circumstances and with the prior written approve
of the Remuneration Committee.

 

12.3         The Company reserves the right to require the Executive to take any
outstanding holiday during any period of notice of termination of the
Appointment (whether given by the Company or the Executive) or to make a payment
in lieu of that outstanding holiday.

 

5

 

12.4         The entitlement to holiday (and on termination of employment to
holiday pay in lieu of holiday) accrues pro rata throughout each Holiday Year
(on the basis of a year of 261 Working Days, disregarding fractions of days).

 

13.                               CONFIDENTIAL INFORMATION

 

13.1         The Executive must not make use of or divulge to any person, and
must use his best endeavours to prevent the use, publication or disclosure of,
any information of a confidential or secret nature:

 

(a)           concerning the business of
the Company or any Group Company and which comes to his knowledge during the
course of or in connection with his employment or his holding any office within
the Group from any source within the Company or any Group Company; or

 

(b)           concerning the business of
any person having dealings with the Company or any Group Company and which is
obtained directly or indirectly in circumstances in which the Company or any
Group Company is subject to a duty of confidentiality in relation to that
information.

 

For the
purposes of Subclause (a) above, information of a confidential or secret
nature includes but is not limited to all and any information about business
plans, maturing new business opportunities, research and development projects,
product formulae, processes, inventions, designs, discoveries or know-how,
sales statistics, marketing surveys and plans, costs, prices and discount
structures, the names, addresses and contact details of customers and potential
customers or suppliers and potential suppliers (whether or not recorded in
writing or on computer disk or tape) which the Company or any Group Company
treats as confidential.

 

13.2         This Clause does not apply to information which:

 

(a)                                  is
used or disclosed in the proper performance of the Executive’s duties or with
the prior written consent of the Company or any Group Company; or

 

(b)                                 is or
comes to be in the public domain (except as a result of a breach of the
Executive’s obligations under Subclause 13.1); or

 

(c)                                  is
ordered to be disclosed by a court of competent jurisdiction or otherwise
required to be disclosed by law.

 

13.3         This Clause continues to apply after the termination of the
Appointment (whether terminated lawfully or not) without limit of time.

 

13.4         Each of the restrictions in each Clause or Subclause above will be
enforceable independently of each of the others and its validity will not be
affected if any of the others is invalid. 
If any of those restrictions is void but would be valid if some part of
the restriction were deleted, the restriction in question will apply with such
modification as may be necessary to make it valid.

 

13.5         The obligations under this Clause 13 are in addition to those
obligations of confidentiality contained in the Cyclacel Standard Terms and
Conditions of Employment which, for the avoidance of doubt, form part of the
Executive’s terms and conditions of employment.

 

6

 

14.                               GRATUITIES

 

The Executive
must not directly or indirectly accept any commission, rebate, discount or
gratuity, in cash or in kind, from any person who has or is likely to have a
business relationship with any Group Company.

 

15.                               CODES OF CONDUCT

 

The Executive
must comply with all codes of conduct from time to time adopted by the Board
and with all applicable rules and regulations of the London Stock Exchange and
any other relevant regulatory body including (without limitation) the Stock
Exchange’s model code on directors dealings in securities and the FSA Code of
Market Conduct.

 

16.                               TERMINATION OF APPOINTMENT

 

16.1         If the Executive:

 

(a)                                  is
guilty of any serious or repeated breach of his obligations under this
agreement and any consent granted under it (including neglecting to diligently
discharge his duties); or

 

(b)                                 is
guilty of serious misconduct or any other conduct which affects or is likely to
materially prejudice the interests of the Company or the Group or is convicted
of an arrestable offence (other than a road traffic offence for which a
non-custodial penalty is imposed); or

 

(c)                                  becomes
bankrupt or makes any arrangement or composition with his creditors; or

 

(d)                                 is
disqualified from being a director of any company by reason of an order made by
any competent court; or

 

(e)                                  resigns
as a director without the prior consent of the Board; or

 

(f)                                    is
guilty of any material breach or non-observance of any code of conduct, rule or
regulation referred to in Clause 15 or fails or ceases to be registered
(where such registration is, in the reasonable opinion of the Board, necessary
for the performance of his duties) by any regulatory body in the United Kingdom
or elsewhere,

 

the Company
may (whether or not any notice of termination has been given under
Subclause 2.2) by written notice to the Executive terminate the
Appointment with immediate effect.

 

16.2         The Company may at any time (whether or not any notice of
termination has been given under Subclause 2.2) terminate the Appointment
with immediate effect by giving notice in writing to the other party on terms
that the Company will pay to the Executive, in lieu of notice under
Subclause 2.2, a sum equal to the salary and the value of contractual
benefits in respect of that part of the period of notice in clause 2.2 which
the Company has not given the Executive. 
If the Executive is paid salary and benefits in lieu of notice he will
not be entitled to any additional payment in respect of holiday or bonus which
he would otherwise have accrued during the notice period or the remainder of
the notice period.

 

16.3         Clause 3.2 allows the Company to suspend any of the Executive’s
duties and powers during any period after notice of termination of the
Appointment has been given by the Company or the Executive.  In particular, the Company may exercise this
right where the Executive leaves

 

7

 

the Company’s
employment in circumstances where it is reasonable for the Company to believe
that he is or is about to become concerned in a business, carried on, or about
to commence, which is, or is likely to be, competitive with any part of the
business of any Group Company with which the Executive was engaged or concerned
in the 12 months before the suspension started.  In addition or alternatively, the Company may during the whole or
any part of such period of notice require the Executive to perform duties
(including any modified duties arising from an exercise by the Company of its
rights under Subclause 3.2) at such locations as the Company may
reasonably require consistent with Clause 4.  Throughout any such period of suspension the Executive’s salary
and other benefits to which he is entitled under this agreement shall continue
to be paid or provided by the Company. 
At any time during such period the Executive will, at the request of the
Board, immediately resign, without claim for compensation, his office as a
director of the Company and any directorship or other office held by him in any
Group Company.

 

16.4         On the termination of the Appointment in any way (whether lawfully
or otherwise) or on either party giving notice to terminate the Appointment or
on the Company exercising its right of suspension as mentioned in
Subclause 16.3, the Executive will at the request of the Board
immediately:

 

(a)                                  resign
all offices held by him in any Group Company (without prejudice to the rights
of any party arising out of this agreement or the termination of the
Appointment);

 

(b)           deliver to the Company all
other property in his possession, custody or under his control belonging to any
Group Company including (but not limited to) computer equipment, mobile phones,
any electrical equipment supplied to the Executive during the course of his
employment, business cards, credit and charge cards, security and computer
passes, original and copy documents or other media on which information is held
in his possession relating to the business or affairs of any Group Company; and

 

(c)           transfer (without payment)
to the Company (or as the Company may direct) any qualifying or nominee shares
provided by it or any third party in any Group Company to him.

 

16.5         With effect from the date of termination of the Appointment, all the
rights and obligations of the parties under this agreement will cease except
for those which are expressed to continue after that date and except in
relation to any breach of any provision of this agreement before that
date.  Termination of the Appointment
will not prejudice any other rights of the Company or the Executive.

 

16.6         If the Executive’s remuneration falls to be assessed for the purpose
of calculating compensation or damages for breach of this agreement, the
parties acknowledge and agree that he has no right to or legitimate expectation
of any future increase in remuneration or any future payment of a bonus.

 

16.7         If during the Appointment or during the period in which any of the
restrictions in this Clause operate after the Termination Date, any person
makes any offer to the Executive of employment or of a contract for services or
of consultancy or any other contract which would or might involve the Executive
in being in breach of any of those restrictions, the Executive must bring the
terms of this Clause to the attention of that person.

 

16.8          If during the Appointment the Executive is granted participation in
a share option or share incentive scheme, any extinction or curtailment of any
rights or benefits under the scheme by reason of any transfer of his employment
or its termination, howsoever arising, will not form

 

8

 

part of any
claim for damages for breach of this agreement or compensation under any
statutory provision.  The effect of any
such transfer, suspension or termination on the Executive’s rights or benefits
under the scheme will be determined in accordance with the rules, terms and
conditions of the scheme and not in accordance with the provisions (other than
this Subclause) of this agreement.

 

17.                               PROTECTIVE COVENANTS

 

17.1         In this Clause:

 

(a)           Relevant Period
means the period of 12 months ending on the Termination Date;

 

(b)           Relevant Business means a business in any country operating in the field of cell cycle
therapeutics.  For the avoidance of
doubt, the Relevant Business includes not only the cell cycle therapeutic area
of oncology but all other cell cycle therapeutic fields that the Company or
another Group Company is involved in on the Termination Date;

 

(c)           Termination Date means the date on which the Appointment terminates; and

 

(d)                                 references
to the Company or another Group Company include its successors in business if
the succession occurs after the Termination Date.

 

17.2         The Executive covenants with the Company that he will not for a
period of 12 months after the Termination Date be concerned in any Relevant
Business.  For this purpose, the Executive
is concerned in a Relevant Business if:

 

(a)           he carries it on as
principal or agent; or

 

(b)           he is a partner, director,
employee, secondee, consultant or agent in, of or to any person who carries on
the business; or

 

(c)                                  he
has any direct or indirect financial interest (as shareholder or otherwise) in
any person who carries on the business,

 

disregarding
any financial interest of a person in securities which are listed or dealt in
on any Recognised Investment Exchange if that person, the Executive and any
person connected with him (within the meaning of section 839 of the Income and
Corporation Taxes Act 1988) are interested in securities which amount to less
than three per cent. of the issued securities of that class and which, in all
circumstances, carry less than three per cent. of the voting rights (if any)
attaching to the issued securities of that class.

 

If the Company
exercises its right to suspend the Executive’s duties and powers under
Subclause 16.3 during any period after notice of termination of the
Appointment has been given by the Company or the Executive, the aggregate of
the period of the suspension and the period after the Termination Date for
which the covenant in this Subclause applies will not exceed 12 months and, if
the aggregate of the two periods would exceed 12 months, the period after the
Termination Date for which the covenant in this Subclause applies will be
reduced accordingly.

 

17.3         The Executive covenants with the Company that he will not directly
or indirectly on his own account or on behalf of or in conjunction with any
person for a period of 12 months after the Termination Date (except on behalf
of the Company or any Group Company):

 

9

 

(a)           canvass or solicit Relevant
Business from any person who has been at any time during the Relevant Period a
customer of the Company or any Group Company with whom the Executive was
actively involved in the course of his employment during the Relevant Period;
or

 

(b)           deal with any such person.

 

17.4         The Executive covenants with the Company that he will not directly
or indirectly on his own account or on behalf of or in conjunction with any
person for a period of 12 months after the Termination Date induce or attempt
to induce any supplier of the Company or any Group Company or distributor of
the Company’s or any Group Company’s products with whom the Executive was
actively involved in the course of his employment during the Relevant Period,
to cease to supply, or to restrict or vary the terms of supply to, the Company
or any Group Company or to cease to distribute any of the Company’s or any
Group Company’s products or restrict or vary the terms of the distributorship
or otherwise interfere with the relationship between a supplier or distributor
and the Company or any Group Company.

 

17.5         The Executive covenants with the Company that he will not directly
or indirectly on his own account or on behalf of or in conjunction with any
person for a period of 12 months after the Termination Date induce or attempt
to induce any employee to whom this Subclause applies to leave the employment
of the Company or any Group Company (whether or not this would be a breach of
contract by the employee).  This
Subclause applies to an employee of the Company or any Group Company with whom
the Executive had material dealings in the course of his employment during the
Relevant Period and who is employed wholly or mainly in the capacity of a
director, a scientist or some other senior role.

 

17.6         The covenants in this Clause are for the benefit of the Company
itself and as trustee for each other Group Company.

 

17.7         Each of the restrictions in each Clause or Subclause above are
enforceable independently of each of the others and its validity is not
affected if any of the others is invalid. 
If any of those restrictions is void but would be valid if some part of
the restriction (including part of any of the definitions in
Subclause 17.1) were deleted, the restriction in question applies with
such modification as may be necessary to make it valid.

 

17.8         The Executive acknowledges that his senior position with the Company
and any Group Company gives him access to and the benefit of confidential
information vital to the continuing business of the Company and any Group
Company and influence over and connection with the Company’s customers,
suppliers, distributors, agents, employees, workers, consultants and directors
and those of any Group Company in or with which the Executive is engaged or in
contact and acknowledges and agrees that the provisions of this Clause are
reasonable in their application to him and necessary but no more than
sufficient to protect the interests of the Company and any Group Company.

 

17.9         If any person, during the Appointment or any period during which the
covenants in this Clause apply, offers to the Executive any arrangement or
contract which might or would cause the Executive to breach any of the
covenants, he will notify that person of the terms of this Clause.

 

18.                               INTELLECTUAL PROPERTY

 

18.1         For purposes of this Agreement, the following definitions apply:

 

10

 

(a)           Intellectual Property Rights means (i) copyright, patents, know-how, confidential information,
database rights, and rights in trademarks and designs (whether registered or
unregistered), (ii) applications for registration, and the right to apply for
registration, for any of the same, and (iii) all other intellectual property
rights and equivalent or similar forms of protection existing anywhere in the
world;

 

(b)           IP Materials
means all documents, software, photographic or graphic works of any type, and
other materials in any medium or format which are created by or on behalf of
the Executive in the course of performing his obligations under this agreement
and which are protected by or relate to Intellectual Property Rights.

 

18.2                           To the extent that ownership of Intellectual Property Rights does
not vest in the Company by operation of law, the Executive hereby assigns to
the Company all Intellectual Property Rights which arise in the course of
performing his obligations under this agreement (including all present and
future copyright, and copyright revivals and extensions).  This assignment shall take effect upon the
creation of each of the Intellectual Property Rights.

 

18.3         The Executive agrees to sign all documents and do all other acts
which the Company requests (at its expense) to enable the Company to enjoy the
full benefit of this Clause.  This
includes joining in any application, which may be made by the Company’s sole
name for registration of any Intellectual Property Rights (such as a patent,
trademark or registered design).

 

18.4         The Executive may only use the Intellectual Property Rights and IP
Materials to perform his obligations under this Agreement, and shall not
disclose any Intellectual Property Rights or IP Materials to any third party
without the express prior written consent of the Company.

 

18.5         The Executive waives all moral rights in IP Materials to which he
would otherwise be entitled under the law of any relevant jurisdiction.

 

18.6         The Executive shall immediately transfer to the company all IP
Materials in his possession or under his control when this agreement expires or
terminates for any reason, or at any time when the Company requests
transfer.  No copies or other record of
any IP Materials may be retained by the Executive except with the prior written
consent of the Company.

 

18.7         This Clause shall survive expiry of this agreement, or its
termination for any reason.

 

18.8         The obligations under this Clause 18 are in addition to those
obligations relating to intellectual property contained in the Cyclacel
Standard Terms and Conditions of Employment which, for the avoidance of doubt,
form part of the Executive’s terms and conditions of employment.

 

19.                               RECONSTRUCTIONS

 

If the Company
is to be wound up for the purpose of a reconstruction or amalgamation or the
Company transfers all or a substantial part of its business to another company
and the Company procures that the Executive is offered employment by the
reconstructed or amalgamated or transferee company on similar terms to the
terms of this agreement for the remainder of the Appointment, the Executive
will have no claim against the Company in respect of the termination of his
employment under this agreement.

 

20.                               GENERAL

 

20.1         As from the effective date of the Appointment all other agreements
or arrangements between the Executive and the Company or any Group Company
relating to the employment of the

 

11

 

Executive will
cease to have effect.  Accordingly, any
remuneration or other benefit paid or provided to or for the Executive under
any other agreements or arrangements in respect of any periods since that date
are deemed to have been received by the Executive on account of the relevant
amounts payable or benefits to be provided to him under this agreement.

 

20.2         The Executive warrants to the Company that by entering into this
agreement and performing his duties under it he will not be in breach of any
contract or other obligation binding on him.

 

21.                               GOVERNING LAW

 

This agreement
is governed by and construed in accordance with English law.

 

22.                               OTHER DOCUMENTS

 

22.1         The following documents have been issued to the Executive and
together form the Executive’s Contract of Employment:

 

(a)           an Offer Letter dated 31st
January, 2001 ;

 

(b)           Cyclacel’s Standard Terms
and Conditions of Employment;

 

(c)                                  the
Company’s Staff Handbook: The contents of section A of the handbook form part
of the contracts of employment of the Company’s employees (including the
Executive). For the avoidance of doubt, section B of the handbook provides
information as to the Company’s current practices and policies in certain areas
but it is not contractually binding;

 

(d)           The Company also operates a
redundancy policy and this does apply to the Executive.

 

22.2         In the event of any discrepancy between the Executive’s Service
Agreement and any of the documents set out in this Clause 22, the Executive’s
Service Agreement shall take precedence.

 

23.                               THIRD PARTY RIGHTS

 

A person who
is not a party to this agreement may not enforce any of its terms under the
Contracts (Rights of Third Parties) Act 1999.

 

AS WITNESS the
hands of the Executive and of the duly authorised representatives of the
Company on the date which appears first on page 1.

 

12

 

SCHEDULE

 

STATEMENT OF EMPLOYMENT PARTICULARS

 

The following
constitutes the statement of the particulars of the Executive’s employment
issued pursuant to the Employment Rights Act 1996.  The particulars are those which apply on the date of this
agreement:

 

Name of employer -
the Company as defined on page 1 above.

 

Name of employee -
the Executive as defined on page 1 above.

 

Date of commencement of continuous employment - 31st January, 2001

 

Scale or rate of remuneration or method of calculating
remuneration - see Clause 5.1.

 

Intervals at which remuneration is paid - monthly - see Clause 5.1.

 

Hours of work -
there are no fixed hours of work - see Clause 3.4.  The Executive agrees that Regulations 4(1)
and (2), 6(1), (2) and (7), 10(1), 11(1) and (2) and 12(1) of the Working Time
Regulations 1998 (48 hour week, night work, rest periods etc.) do not apply to
the Appointment.

 

Holidays (including public holidays) and holiday pay - see Clause 12.  The
Company holiday policy applies to the Executive.

 

Sickness or injury and sick pay - see Clause 11.

 

Pension - see
Clause 9.  A contracting-out
certificate within the meaning of Part III of the Pension Schemes Act 1993 is
not in force.

 

Notice - see
Clause 2.2.

 

Job title - Chief
Scientific Officer.

 

Place of work - see
Clause 4.  The employer’s address
is as stated on page 1 above.

 

Collective agreements - the Company is not a party to any collective agreement which
affects the Executive’s employment.

 

Working overseas -
the Executive may be required to work overseas at the reasonable request of the
Board.

 

Grievance procedure - if the Executive is dissatisfied with any disciplinary decision or
seeks to redress any grievance relating to his employment, he should raise this
in the first instance with the Chief Executive.  If the matter is not satisfactorily resolved, the Executive
should then apply in writing to the Board and the Board will endeavour to
propose a solution within 14 days.

 

Discipline - the
Company expects the highest standards of performance and conduct from the
members of its Board of Directors. 
There are no specific disciplinary rules applicable to the Executive’s
employment.

 

13

 

SIGNATORIES

 

 

	
  SIGNED by

  	
  )

  
	
  on behalf of
  CYCLACEL
  GROUP PLC

  	
  )  /s/ S. Rombotis

  
	
  in the
  presence of:  /s/ Paul McBarron

  	
  )

  
	
   

  	
   

  
	
   

  	
   

  
	
  SIGNED by DR ROBERT
  JACKSON

  	
  )

  
	
  in the
  presence of:  /s/ Dr. F. Scaerou

  	
  )  /s/ Robert Jackson

  
	
   

  	
   

  

 

14Exhibit 10.6

 

	
  

  	
   

  	
   

  
	
  â

  	
  Cyclacel Group plc

  
	
   

  	
   

  

 

1 July,
2004

 

Sir
John Banham

West Country
Management

Alfriston

20 Crescent
Road

Sidcup

Kent

DA15 7HN

 

 

Dear Sir John,

 

I am
pleased to confirm the decision of the board of directors of Cyclacel Group plc to appoint you as a non-executive chairman
of Cyclacel Group plc (the Company) with effect from the
listing of the Company on the London Stock Exchange. .

 

1.                                      Appointment

 

1.1           Your appointment is for an initial term of
three years (subject to the Company’s Articles of Association (the Articles)).  At the end of the initial term, subject to
the approval of the board of directors of the Company (the Board) and the Company’s
Shareholders, your directorship may be renewed for a further term.  Renewal of your appointment is contingent on
satisfactory performance and re-election at future annual general meetings (see
paragraph 1.2 below).  Non-executive
directors are typically expected to serve two three-year terms although the
Board may invite you to serve an additional term.

 

1.2           The office of non-executive director will
be held in accordance with the Articles as may be varied from time to
time.  Nothing in this letter will be
taken to exclude or vary the Articles as they apply to you as a director of the
Company.  For the avoidance of doubt,
the Articles to be adopted shortly and immediately prior to a listing on the
London Stock Exchange or similar major stock market (a Listing) will require you to
formally retire from the office of non-executive director at the next annual
general meeting.  However, you will be
eligible for re-election to serve until you are subject to the relevant
provisions in the Articles requiring retirement of directors by rotation.

 

2.                                      Your role

 

2.1           Non-executive directors have the same
general legal responsibilities to the Company as any other director.  The Board as a whole is collectively
responsible for the success of the company. 
The Board:

 

(a)                                  provides entrepreneurial
leadership of the Company within a framework of prudent and effective controls
which enable risk to be assessed and managed;

 

(b)                                 sets the Company’s strategic
aims, ensures that the necessary financial and human resources are in place for
the company to meet its objectives, and reviews management performance; and

 

 

Cyclacel Group plc, Dundee Technopole, James Lindsay Place,
Dundee DD1 5JJ   Tel: (01382)
206062   Fax: (01382) 206067

Registered Office: 6-8 Underwood Street, London N1
7JQ  No: 5090795

 

1

 

(c)                                  sets the Company’s values and
standards and ensures that its obligations to its shareholders and others are
understood and met.

 

All directors must take decisions objectively in the
interests of the Company.  As a director
you also owe a fiduciary duty to the Company which includes an obligation not
to do anything that might bring the Company into disrepute.

 

2.2                                 In addition to the
requirements of all directors, your role as a non-executive director has the
following key elements:

 

(a)                                  to challenge constructively
and help develop proposals on strategy;

 

(b)                                 to scrutinise the performance
of management in meeting agreed goals and objectives and monitor the reporting
of performance;

 

(c)                                  to be satisfied on the
integrity of financial information and that financial controls and systems of
risk management are robust and defensible; and

 

(d)                                 to be responsible for
determining appropriate levels of remuneration of executive directors and have
a prime role in appointing, and where necessary removing, executive directors
and in succession planning.

 

2.3                                 As Chairman you will also be
required to attend and chair all board meetings, the annual general meeting,
any extraordinary general meeting and committee meetings to which you are
appointed.

 

3.                                      Compliance

 

3.1           You will comply with, and seek to ensure
that the Company complies or will comply within a reasonable period of time
with the relevant requirements of the listing rules of the UK Listing Authority
and the Admission and Disclosure Standards of the London Stock Exchange, the
corresponding regulations of the NASDAQ Market and the US Securities and
Exchange Commission, including but not limited to the Sarbanes-Oxley Act of
2002, and other legal or regulatory requirements in any relevant jurisdiction
which apply to the Company.  In
particular, you will comply and seek to ensure that the Company complies, or
will comply within a reasonable period of time, with the “Model Code” on
directors’ dealings in securities, the Combined Code on Corporate Governance
and/or with any code of conduct relating to directors adopted by the Company
from time to time or other legal or regulatory requirements in any relevant
jurisdiction which apply to the Company.

 

3.2           The Company will reimburse you for any
reasonable fees or other expenses you incur in taking advice from the Company’s
financial and legal advisors or other independent financial and legal advisors
in relation to the performance of your duties as a non-executive director of
the Company.  Before seeking such advice
and incurring any expense you should first obtain the written approval of the
Board.

 

4.                                      Outside interests

 

4.1                                 You confirm that you and/or
persons connected to you have business interests other than those of the
Company and you have promptly declared in writing to the Company any conflicts
of interest that are apparent at present. 
In the event that you become aware of any potential conflicts of
interest with your role as non-executive director, these should be notified to
the Board as soon as they become apparent.

 

2

 

4.2                                 During your appointment, you
should not accept appointments (whether as director, agent, employee or
consultant), nor should you nor any connected persons to you hold shares in nor
be interested in any contracts with any company or firm engaged in a business
competing with the Company without first disclosing the same to the Board and
obtaining its written consent such consent not to be unreasonably
withheld.  This restriction does not
apply to shareholdings held for investment purposes where the shares concerned
are quoted or dealt in on a recognised investment exchange and represent one
per cent or less of the issued shares of the class concerned.

 

5.                                      Committees

 

You will also serve as a member of the Board’s Audit
Committee, Remuneration Committee and Nomination Committee.  This will be covered in a separate
communication setting out the committee’s terms of reference and any specific
responsibilities relating thereto.

 

6.                                      Time commitment

 

You will not normally be required to provide your
services as non-executive director for more than 24
days per annum.  This will include your
attendance which is required at annual and extraordinary general meetings of
the Company and bi-monthly Board meetings (flexibility as to the exact dates
will be required) as well as any meetings of the non-executive directors.  In addition, you will be expected to devote
appropriate preparation time ahead of each meeting.

 

7.                                      Fees

 

7.1           The Company will pay you a director’s fee
of £25,000 per annum (gross) and payment
will be by equal monthly instalments in arrears. All payments will be made on a
gross basis by quarterly instalments in arrears against an invoice.  You agree that these arrangements will be
disclosed to shareholders in the Company’s Remuneration Committee Report.

 

7.2           The level of fees will be reviewed
annually.  All fees will cease to accrue
with effect from the date on which your appointment terminates.

 

7.3           The Company will reimburse you for all
reasonable and properly documented expenses you incur in performing your
duties.  If you are in any doubt as to
whether or not an expense is reasonable, you should discuss it with the Company
Secretary prior to incurring it.

 

7.4           You agree to obtain your own legal and tax
advice with regard to the tax consequences in any jurisdiction of payments made
to you or your designated entity by the Company.  You also agree to indemnify the Company against any applicable
withholding, social security and other taxes which may arise as a result of
such payments.

 

8.                                      Confidential Information

 

8.1                                 During your appointment you
will have access to trade secrets and other confidential information regarding
the business and financial affairs of the Company and any of its subsidiaries,
undertakings or affiliates.  You must not,
either during your appointment or afterwards, disclose to anyone or otherwise
make use of this confidential information, except in the proper performance of
your duties or as may be required by law or by any competent regulatory
body.  This does not apply, however, to
any information already in the public domain.

 

3

 

8.2           Your attention is drawn, in particular, to
the disclosure of price sensitive information as regulated by law.  You must not make any statements that might
risk breaching the relevant legal requirements without prior clearance from the
Board.

 

9.                                      Indemnification and Insurance

 

You will be entitled to the indemnification afforded
to directors by the Articles.  You will
also be covered by and will be required to participate in the Company’s
Directors and Officers liability insurance. 
The Company has obtained and will use its reasonable endeavours to
continue to obtain appropriate Directors and Officers liability insurance
subject to applicable limits as set by the Board from time to time for your
benefit and that of the other directors of the Company for as long as you or
the other directors are non-executive directors of the Company.

 

10.                               Termination of Appointment

 

10.1         Your appointment may be terminated by you
or by the Company at any time upon three months’ written notice.

 

10.2         At the time of
executing this letter you will appoint the Company as your attorney by
executing a power of attorney in the form set out in the Schedule to this
letter to do and sign in your name and on your behalf any thing and document as
may be required to make your resignation effective.

 

10.3         Your signature on the enclosed copy of this
letter constitutes your acceptance of the terms of this letter and your
irrevocable resignation as a director of the Company with effect from the date
of expiry of the term specified in paragraph 1.1.

 

10.4         Your appointment will terminate
automatically (without compensation) and you will no longer receive fees (as
referred to in paragraphs 6 and 7.1) on the date of your ceasing to be a
director.  On termination of your
appointment for whatever reason, you will promptly return to the Company all
papers, electronic files and records and property of the Company and its Group
Companies (if any) including any copies thereof which are in your possession.

 

4

 

	
  SIGNED by 

  	
  )

  
	
  on behalf of CYCLACEL GROUP PLC

  	
  )

  
	
  in the presence of:  /s/ James
  Mountain

  	
  )  /s/ Paul McBarron

  
	
   

  	
   

  
	
   

  	
   

  
	
  SIGNED by SIR JOHN BANHAM

  	
  )

  
	
  in the presence of:  /s/ Gavin Weir

  	
  )  /s/ John Banham

  
	
   

  	
   

  

 

5

 

SCHEDULE 1

 

POWER
OF ATTORNEY

 

By this Power of Attorney made on 1 July, 2004, I Sir John Banham of West Country Management, Alfriston, 20 Crescent Road, Sidcup, Kent
DA15 7HN in accordance with the terms of my
letter of appointment (the Appointment Letter) with Cyclacel Group plc
(the Company)
dated today HEREBY APPOINT the Company to act as my attorney with authority in
my name and on my behalf (so that words and expressions defined in the
Appointment Letter shall have the same meaning herein):

 

(a)                                  during the Appointment or after it has
terminated, to do any thing and sign or execute any document as may be required
under the constitution of the Company and each Group Company to make my
resignation as a director from those companies effective; and

 

(c)                                  to appoint any substitute and to
delegate to that substitute all or any powers conferred by this Power of
Attorney.

 

I declare that this Power of Attorney, having been given by me to secure
my obligations under Clause 10 of the Appointment Letter, shall be irrevocable
in accordance with section 4 of the Powers of Attorney Act 1971.

 

IN WITNESS whereof this Power of Attorney has
been duly executed.

 

 

	
  EXECUTED as a deed by

  	
  )

  
	
  Sir John
  Banham

  	
  )  /s/ John Banham

  
	
  in the presence of:

  	
  )

  

 

	
  Witness:

  	
   

  	
   

  
	
  Signature:

  	
  /s/ Gavin Weir

  	
   

  
	
  Name:

  	
  Gavin Weir

  	
   

  

 

6

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