Document:

exv10w12w4

 

EXHIBIT 10.12.4

Dated 12th June 2003

Plantronics Limited (1)

- and -

Philip Vanhoutte (2)

SERVICE AGREEMENT

Plantronics Ltd

Interface Business Park

Bincknoll Lane

Wootton Bassett

Wiltshire

SN4 8QQ

 

 

DATE:

PARTIES:

	(1)  	“The Company” Plantronics Limited of Interface Business Park, Bincknoll Lane, Wootton
Bassett, Wiltshire SN4 8QQ
	 
	(2)  	“The Executive”Philip Vanhoutte of Bryggia, Ridgeway, Horsell, Woking, Surrey.
	 
	1.  	Employment and Duration 
	 
	1.1  	The Company employs the Executive as Managing Director or in such other position as may be
agreed from time to time such other position to be at a similar status and salary. The Company may
require the Executive to perform other duties or tasks not within the scope of his normal duties
and the Executive agrees to perform those duties or undertake those tasks as if they were
specifically required under this agreement.
	 
	1.2  	The employment of the Executive in this position will start on a date to be agreed and no
employment with any previous employer counts as part of the Executive’s period of continuous
employment with the Company. The Company may from time to time appoint any other person or persons
to act jointly with the Executive in his employment.
	 
	1.3  	The Executive warrants that by virtue of entering into this Agreement he will not be in breach
of any express or implied terms of any contract with or of any other obligation to any third party
binding upon him.
	 
	2.  	Hours of Work and Duties of Executive
	 
	2.1  	The Executive’s normal hours of work are from 08.30am to
5.00pm Monday to Friday each week
together with such additional hours as may be necessary so as properly to fulfil his duties.
	 
	2.2  	The Executive agrees that his average weekly working hours may be in excess of those prescribed
by law (the “Working Time Waiver”). The Working Time Waiver will remain in force indefinitely
unless and until the Executive gives the Company three months notice in writing of his intention to
terminate it.
	 
	2.3  	The Executive will at all times during the period of this agreement:

	 	2.3.1  	devote the whole of his time, attention and ability to the duties of his employment;
	 
	 	2.3.2  	faithfully and diligently perform his duties under this agreement subject to such
restrictions as the Company may from time to time impose;
	 
	 	2.3.3  	obey all lawful and reasonable directions of the Company;
	 
	 	2.3.4  	use his best endeavours to promote the interests of the Company;
	 
	 	2.3.5  	at all times keep the Company promptly and fully informed (in writing if so requested) of his
conduct of the business or affairs of the Company and provide such explanations as the Company may
require;
	 
	 	2.3.6  	comply with all the Company’s rules, regulations, policies and procedures from time to time
in force; and

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	 	2.3.7  	not make any untrue misleading or disparaging statement
relating to the Company.

	2.4  	The provisions set out in clause 2.3 above will also apply as though references to each Group
Company were substituted for references to the Company.
	 
	2.5  	The Executive will (without further remuneration) if and for so long as the Company requires:

	 	2.5.1  	carry out duties on behalf of any Group Company;
	 
	 	2.5.2  	act as an officer of any Group Company or hold any other employment or office as nominee or
representative of the Company;
	 
	 	2.5.3  	carry out such duties and the duties attendant on any such employment as if they were duties
to be performed by him on behalf of the Company.

	2.6  	The Company may second the Executive on reasonable notice to be employed by any Group Company
without prejudice to his rights under this agreement.
	 
	2.7  	The Company may at its sole discretion transfer this agreement to any Group Company at any
time.
	 
	3.  	Place of Work and Residence 
	 
	3.1  	The Executive will perform his duties at the Company’s office at Interface Business Park,
Bincknoll Lane, Wootton Bassett, Wiltshire, SN4 8QQ and/or such other place as the Company
reasonably requires whether inside or outside the United Kingdom but the Company will not without
his prior consent require him to reside anywhere outside the United Kingdom except for business
visits in the ordinary course of his duties.
	 
	4.  	Pay
	 
	4.1  	During his employment the Company will pay to the Executive a base salary at the rate of
£160,00 per year payable by equal monthly instalments in arrears.
	 
	4.2  	The salary will be deemed to include any fees receivable by the Executive as a Director of the
Company.
	 
	4.3  	The Executive’s salary will be reviewed by the Company in July of each year and may be
increased by the Company with effect from that date by such amount if any as it thinks fit.
	 
	4.4  	The Company will pay to the Executive such bonus as outlined below, it will be payable in the
light of the overall financial and trading position of the Company and the performance of the
Executive of his duties. Any entitlement to a bonus payment is conditional on the Executive being
in this employment on the date for payment.
	 
	4.5  	Bonus 

	 	   	You will be eligible to receive a maximum bonus, this is payable on the achievement of EMEA and
Corporate objectives. This represents the maximum on target earnings. It is based on a percentage
of your annual base salary as shown below.

	 	§  	Whilst receiving housing allowance, the bonus will be 50% of base salary (split 30% quarterly,
20% annually).

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	 	§  	On cessation of the housing allowance, the bonus will be based on 60% of base salary (split
40% quarterly, 20% annually)

	   	The bonus is payable on the achievement of EMEA and Corporate objectives as supplied by me to you.
	 
	4.6  	Housing Allowance 
	 
	   	In addition to your base salary you will receive an annual
housing allowance of £40,000 paid monthly with your salary. This
will be payable for a maximum period of months from commencement of employment.
	 
	4.7  	Car Allowance 
	 
	   	You will be eligible to receive a company car allowance of £12,000 per annum. This is paid monthly
with your salary.
	 
	4.8  	Profit Share 
	 
	   	You will be eligible for the EMEA Profit Sharing Plan. This currently provides up to an additional
6% of annual base salary contingent on worldwide quarterly results of Plantronics Inc.
	 
	5.  	Pension 
	 
	5.1  	On commencement with the Company the Executive is entitled to join the Company’s Pension
Scheme, subject to the terms of its Deed and Rules from time to time, which is administered by
Clerical Medical Investment Group or such other pension scheme as the Company shall from time to
time determine. The Company will contribute a sum equal to 5% of
the Employee’s normal basic remuneration each year. Full details of the pension scheme are
available from the Human Resources office.
	 
	5.2  	A contracting out certificate under the Pension Schemes Act 1993 is not in force.
	 
	6.  	Expenses 
	 
	6.1  	The Company will reimburse to the Executive all travelling, hotel, entertainment and other
expenses in accordance with the Finance Expense Policy. A copy of the Expense Policy is available
from the Finance Department office.
	 
	6.2  	The Company will pay the cost of the annual membership subscription of the Executive to his
professional body or trade organisation.
	 
	6.3  	Any benefits provided by the Company to the Executive or his family which are not expressly
referred to in this agreement are ex gratia and are at the entire discretion of the company and do
not form part of the Executive’s terms of employment.
	 
	7.  	Insurance benefits 
	 
	7.1  	On commencement with the Company and subject to the insurance company concerned accepting
the Executive for cover under the relevant policy at the insurance company’s normal rates the
Executive will be entitled to join, subject to the terms and conditions of the relevant policies:

	 	7.1.1  	The Company’s private medical expenses insurance scheme or such other private medical
expenses insurance scheme as the Company may decide from time to time;

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	7.2  	The Company is only obliged to maintain payment of premiums in respect of this scheme and shall
not be obliged to pay any benefits to the Executive except such (if any) as are received by the
Company from any relevant insurance company.
	 
	7.3  	The Company reserves the right to terminate the Executive’s employment notwithstanding that any
entitlement under these schemes has not arisen or has not been exhausted.
	 
	7.4  	Further details of the scheme can be obtained upon request.
	 
	8.  	Holiday 
	 
	8.1  	In addition to statutory holidays the Executive is entitled to 25 working days paid holiday in
each holiday year which runs from
1st
January to 31st December to be taken at such time or times as
are agreed with the Company. Holidays will be pro rated in line with the commencement date.
	 
	8.2  	No unused part of the Executive’s holiday entitlement shall be carried forward to a subsequent
year without the written consent of the Company. No more than two weeks working days may be taken
consecutively.
	 
	8.3  	On the termination of his employment the Executive will be entitled to pay in lieu of
outstanding holiday entitlement or will be required to repay to the Company any salary received for
holiday taken in excess of his actual entitlement.
	 
	8.4  	The Company may require the Executive to take any unused holiday during his notice period, even
if booked to be taken after the end of the notice period.
	 
	8.5  	For the purpose of calculating any holiday pay one days pay will be the Executive’s annual
salary divided by the number of working days in a year.
	 
	9.  	Computers 
	 
	9.1  	The Executive must comply with the Company’s IT policies this includes, but is not limited to
the Internet and e mail policy and Data and Software policy as amended from time to time, a copy of
which is available on request from the IT department. Failure to comply may result in disciplinary
action and, in serious cases, dismissal.
	 
	10.  	Discoveries and Inventions 
	 
	10.1  	If at any time during his employment the Executive (whether alone or with any other
person) makes any Discovery, whether relating directly or indirectly to the business of the
Company, the Executive will promptly disclose to the Company full details, of such Discovery to
enable the Company to determine whether it is a Company Invention. If the Discovery is not a
Company Invention the Company will treat all information disclosed to it by the Executive as
confidential information which is the property of the Executive.
	 
	10.2  	If the Discovery is a Company Invention the Executive will hold it in trust for the Company,
and at the request and expense of the Company do all things necessary or desirable to enable the
Company or its nominee to obtain the benefit of the Company Invention and to secure patent or other
appropriate forms of protection for it throughout the world.

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	10.3  	Decisions as to the patenting and exploitation of any Company Invention will be in the sole
discretion of the Company.
	 
	10.4  	The Executive irrevocably appoints the Company (acting by both person or persons as the Board
nominates) to be his Attorney in his name and on his behalf to execute, sign and do all such
instruments or things and generally to use the Executive’s name for the purpose of giving to the
Company or its nominee the full benefit of the provisions of this clause and a certificate in
writing signed by any Director or the Secretary of the Company, that any instrument or act falls
within the authority hereby conferred, will be conclusive evidence that such is the case so far as
any third party is concerned
	 
	11.  	Copyright 
	 
	11.1  	The Executive will promptly disclose to the Company all copyright works or designs originated,
conceived, written or made by him alone or with others (except only those conceived, written or
made by him wholly outside his normal working hours and wholly unconnected with his employment) and
will until such rights are fully and absolutely vested in the Company hold them in trust for the
Company.
	 
	11.2  	The Executive hereby assigns to the Company by way of future assignment all copyright design
right and other proprietary rights, if any, for the full terms thereof throughout the world in
respect of all copyright works and designs originated, conceived, written or made by the Executive
(except only those works or designs originated, conceived, written or made by the Executive wholly
outside his normal working hours and wholly unconnected with his employment) during the period of
his employment hereunder.
	 
	11.3  	The Executive hereby irrevocably and unconditionally waives in favour of the Company any and
all moral rights conferred on him by Chapter IV of Part 1 of the Copyright Designs and Patents Act
1988 for any work in which copyright or design right is vested in the Company whether by this
Agreement or otherwise.
	 
	11.4  	The Executive will at the request and expense of the Company do all things necessary or
desirable to substantiate the rights of the Company under this clause.
	 
	12.  	Conflict of Interest 
	 
	12.1  	During this agreement the Executive will not (except with the prior written consent of the
Company) be directly or indirectly engaged concerned or interested in any other business which:

	 	12.1.1  	is wholly or partly in competition with the business carried on by the Company; or
	 
	 	12.1.2  	is a supplier or customer of the Company;

	   	Provided that the Executive may hold any units of any authorised unit trust and up to three per
cent of the issued shares, debentures or other securities of any class of any company whose shares
are listed on a Recognised Investment Exchange.

	12.2  	The Executive will not directly or indirectly receive or obtain any gift discount rebate
commission or other inducement (whether in cash or kind) in respect of any sale or purchase of any
goods or services effected or other business transacted (whether or not by him) by or on behalf of
the Company and will immediately account to the Company for any amount or inducement actually
received by him.

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	13.  	Confidentiality 
	 
	13.1  	The Executive will not either during his employment or at any time after its termination:

	 	13.1.1  	disclose Confidential Business Information to any person or persons (except in the proper
performance of his duties or as required by law);
	 
	 	13.1.2  	use Confidential Business Information for his own purposes or for any purposes other than
those of the Company;
	 
	 	13.1.3  	through any failure to exercise all due care and diligence cause any unauthorised disclosure
of Confidential Business Information.

	13.2  	All notes, memoranda, records (whether or not in documentary form or on computer disk or tape)
made by the Executive relating to the business of the Company will be
and remain the property of the Company and will be delivered by him to the Company forthwith upon
request.

	14.  	Medical Examination 
	 
	14.1  	The Executive will at the request and expense of the Company submit to a medical
examination by a registered medical practitioner nominated by the Company and shall provide blood
urine or other like specimens for analysis if so requested. The Executive will authorise such
medical practitioner to disclose to and discuss with the Company’s medical adviser the results of
the examination and the matters which arise from it so that the Company’s medical adviser can
notify the Company of any matters he considers might hinder or impair the Executive from properly
performing any duties of his employment at any time.
	 
	15.  	Incapacity 
	 
	15.1  	If the Executive is absent because of illness injury or other incapacity he will notify
the Company forthwith.
	 
	15.2  	Immediately following his return to work the Executive will complete a Self-Certification
form detailing the reason for his absence.
	 
	15.3  	If the Executive is so absent for seven or more consecutive days he will provide a medical
practitioner’s statement on the eighth day and regularly thereafter so that the whole period of
absence is certified by such statements.
	 
	15.4  	Under the provisions of the Company’s Sick Pay Scheme, the Executive may be entitled to
Company Sick Pay depending on service with the Company. A copy of the Company Sickness Policy
detailing Company Sick Pay can be obtained by either contacting the HR department or going to the
HR Intranet site.
	 
	15.5  	If the Executive shall receive any payment(s) from a third party (including his own insurance
company) in respect of damages for absence from employment due to incapacity, then any sum(s) paid
by the Company to him in respect of the same period of absence shall be recoverable by the Company
out of such damages as money due to the Company.
	 
	15.6  	The Company shall be entitled to review the Executive’s sickness record and in line with the
sickess policy may dismiss him on the grounds of such absence notwithstanding that any entitlement
to sick pay has not been exhausted.

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	16.  	Termination of Agreement 
	 
	16.1  	Suspension
	 
	   	In order to investigate a complaint against the Executive of misconduct the Company may
suspend the Executive on full pay for so long as it considers necessary to carry out a proper
investigation and hold a disciplinary hearing.
	 
	16.2  	Immediate dismissal

	   	The Company may terminate this agreement with immediate effect if the Executive:

	 	16.2.1  	commits any act of gross misconduct or repeats or continues (after written warning) any
other serious breach of his obligations under this agreement; or
	 
	 	16.2.2  	is guilty of any conduct which has a serious adverse effect on the Company; or
	 
	 	16.2.3  	is convicted of any criminal offence punishable with 6 months or more imprisonment
(excluding an offence under road traffic legislation in the United Kingdom or elsewhere for which
he is not sentenced to any term of imprisonment whether immediate or suspended); or
	 
	 	16.2.4  	commits any act of dishonesty whether relating to the Company, any of its employees or
otherwise; or
	 
	 	16.2.5  	becomes bankrupt or makes any arrangement or composition with his creditors generally; or
	 
	 	16.2.6  	is in the opinion of the Company grossly incompetent in the performance of his duties; or
	 
	 	16.2.7  	becomes prohibited by law from being a director; or
	 
	 	16.2.8  	vacates his office of director of the Company pursuant to the Company’s Articles of
Association save if the vacation is caused by illness (including mental disorder) or injury.

	16.3  	Dismissal on notice

	   	The Executive’s employment may be terminated by either the Company or the Executive giving 6
months notice in writing. Once notice to terminate the Executive’s employment has been given by the
Company, the Company may:

	 	16.3.1  	pay to the Executive 24 months base salary if termination occurs in the first
12 months of employment. 12 months base salary if termination occurs in the second 12 months of
employment. 6 months base salary thereafter. Should any of 16.2 apply then 6 months base salary
will apply.

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	 	16.3.2  	at its sole discretion require the Executive during his notice period or its equivalent when
no notice is given (or any part thereof): (i) to perform all his normal duties; or (ii) to perform
only a part of his normal duties; or (iii) to perform such duties as may reasonably be required of
him; or (iv) not to perform any duties. If the Company requires the Executive to perform duties or
no duties under (ii), (iii) or (iv) above it may require him to be available at his home on call.
	 
	 	16.3.3  	During the period of notice, including any garden leave, the Executive will remain an
employee of the Company and remain bound by these terms and conditions. The Executive will not be
permitted to work for any other person, firm, client, corporation or on his own behalf without the
Company’s written consent. The Executive will not be permitted to contact any customers, clients,
employees or suppliers of the Company without the Company’s prior written consent. This is without
prejudice to his rights to remuneration and all other contractual benefits under this agreement.

	16.5  	Miscellaneous

	 	16.5.1  	The Executive’s employment will automatically terminate at the end of the month in
which he attains the age of sixty.
	 
	 	16.5.2  	On the termination of this agreement for whatever reason, the Executive will at the request
of the Company:

	 	16.5.2.1  	resign (without prejudice to any claims which the Executive may have against any Company
arising out of this agreement or the termination thereof) from office as a Director of the Company;
and in the event of his failure so to do the Company is hereby irrevocably authorised to appoint
some person in his name and on his behalf to sign and deliver such resignation or resignations to
the Company of which the Executive is at the material time a director or other officer; and
	 
	 	16.5.2.2  	transfer without payment to the Company or as the Company may direct any shares provided
by it to him to enable him to qualify as a director and any shares in any Company held by him as a
nominee for the Company and if he should fail to do so within seven days the Company is hereby
irrevocably authorised to appoint some person in his name and on his behalf to sign any documents
or do any things necessary or requisite to give effect to these; and
	 
	 	16.5.2.3  	immediately deliver to the Company or to its orders all books, documents, papers
(including copies), materials, computer equipment, keys and other property of or relating to the
business of the Company then in his possession or which are or were last under his power or
control.

	17.  	Post termination obligations of the Executive
	 
	17.1  	The Executive hereby covenants that he shall not (without the prior consent in writing of the
Company) for a period of six months immediately following effective termination of his employment,
within the Restricted Area and whether on his own account or in conjunction with or on behalf of
any other person, firm, company or other organisation, and whether as an employee, director,
principal, agent, consultant or in any other capacity whatsoever in competition with the Company be
directly or indirectly employed or engaged in or perform services in respect of:

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	 	17.1.1  	the research into, development, manufacture, supply or marketing of any product which is of
the same or similar type to any product researched, developed, manufactured, supplied, or marketed
by the Company during the twelve months immediately preceding the Termination Date;
	 
	 	17.1.2  	the development or provision of any services (including but not limited to technical and
product support, or consultancy or customer services) which are of the same or similar type to any
services provided by the Company during the twelve months preceding the Termination Date;

	   	PROVIDED ALWAYS that the provisions of this section shall apply only in respect of products or
services with which he was either personally concerned or for which he was responsible whilst
employed by the Company during the twelve months immediately preceding the Termination Date.

	17.2.1  	The Executive covenants that he will not for a period of six months immediately following
the Termination Date, whether on his own behalf or in conjunction with any person, company,
business entity or other organisation whatsoever directly or indirectly:

	 	17.2.1  	solicit or assist in soliciting in competition with the Company the custom or business of
any Customer or Prospective Customer within the Restricted
Area:

	 	17.2.1.1  	with whom he has had personal contact or dealings on behalf of the Company during the
twelve months immediately preceding the Termination Date; or
	 
	 	17.2.1.2  	with whom employees reporting to him have had personal contact or dealings on behalf of
the Company during the twelve months immediately preceding the Termination Date; or
	 
	 	17.2.1.3  	or whom he was directly or indirectly responsible during the twelve months immediately
preceding the Termination Date.

	 	17.2.2  	accept, or facilitate the acceptance of, or deal with, in competition with the Company the
custom or business of any Customer or Prospective Customer.

	17.3  	The Executive covenants that he will not for a period of 6 months immediately following the
effective termination of his employment either on his account or in conjunction with or on behalf
of any other person, company, business entity or other organisation whatsoever directly or
indirectly:

	 	17.3.1  	induce, solicit, entice or procure, any person who is an employee to leave such employment,
where that person is:

	 	17.3.1.1  	an Employee of the Company on the Termination Date; or
	 
	 	17.3.1.2  	had been an Employee of the Company in any part of the twelve months immediately preceding
the Termination Date; or

	17.4  	The Executive acknowledges that:

	 	17.4.1  	Each of the foregoing sub-clauses of this clause constitutes an entirely separate and
independent restriction upon him; and

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	 	17.4.2  	The duration, extent and application of each of the restrictions are no greater than is
necessary for the protection of the interests of the Company.

	17.5  	The restrictions contained in this clause are considered to be reasonable but if any of the
restrictions are found to be void in circumstances where it would be valid if some part of it were
deleted it is agreed that the restrictions shall apply with such deletion as is necessary to make
it valid.
	 
	17.6  	At any time, before or after the Termination Date, the Company is entitled to vary the extent
and duration of the restrictive covenants contained in this clause, but may not vary them so as to
make them more onerous.
	 
	17.7  	Where no duties are assigned to the Executive during any period of notice the period of 6
months for the purpose of the restrictions contained in this clause runs from the last date on
which the Executive carried out any duties assigned to him by the Corn pany.
	 
	18.  	Disciplinary Rules 
	 
	18.1  	The Executive is subject to the Company’s Disciplinary Rules and Disciplinary Procedure, a
copy of which is available from the Company. These rules are non- contractual.
	 
	19.  	Grievances 
	 
	19.1  	If the Executive has a grievance regarding his employment he should raise it with the CEO in
writing. A grievance meeting will be arranged and the Executive will have the right to be
accompanied by a colleague of his choice. Where necessary the grievance will be investigated and
once this investigation has been completed the Executive will be notified of the outcome in
writing.
	 
	20.  	Equal Opportunities 
	 
	20.1  	The Company is an equal opportunities employer. No job applicant or employee will receive less
favourable treatment on the grounds of sex, sexual orientation, disability, marital status, creed,
colour, race, religion or ethnic origins, or be disadvantaged by conditions or requirements that
cannot be shown to be justifiable. It is the duty of all employees to ensure that this policy is
observed at all times. The Company will seek to ensure that individuals are selected and promoted
on the basis of their aptitude, skills and ability.
	 
	20.2  	If the Executive believes that the Company or any of its employees has acted in breach of the
policy, he should immediately raise the matter through the grievance procedure. In the event that
such complaints are found to be well founded, disciplinary action will be taken against those
responsible and in serious cases may result in dismissal. In particular the Company regards with
severity any instances of sex, race or disability harassment.
	 
	21.  	Deductions from Wages 
	 
	21.1  	The Company shall be entitled to suspend the Executive’s employment without pay in the event
of his refusing to obey a lawful order including (but not restricted to) those given to comply with
the Company’s statutory obligations.

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	21.2  	The Company shall be entitled, either during the Executive’s employment or on termination, to
deduct from the Executive’s salary or from expenses owed, or from any other sums of whatever nature
due to the Executive any sums due from the Executive to the Company. Sums due from the Executive
may include but are not limited to the following:

	 	21.2.1  	Outstanding loans made to the Executive by the Company;
	 
	 	21.2.2  	Advances of pay;
	 
	 	21.2.3  	Overpayments of any description including without limitation in relation to salary,
remuneration, expenses or other payment made to the Executive during the course of this employment;
	 
	 	21.2.4  	The amount of any expenses claimed by the Executive and paid but subsequently disallowed by
the Company;
	 
	 	21.2.5  	Excess holiday pay;
	 
	 	21.2.6  	Payment made by the Company in excess of Statutory Sick Pay in relation to absences
resulting from an accident caused by a third party where the Executive recovers any amount from any
third party (including his own insurance company) but the Company’s recovery in such circumstances
shall not exceed the amount of the payment received by the Executive from the third party (if any);
and

	22.  	Health and Safety 
	 
	22.1  	The Company has a detailed health and safety policy, a copy of which is available from the
Quality Department. The Executive is required to read this policy and take all necessary steps to
comply. Failure to comply may result in disciplinary action and, in serious cases, dismissal.
	 
	23.  	Data Protection Act 
	 
	23.1  	The Executive consents to the Company processing his personal data for the purposes of
his employment, for administrative purposes and for the purposes of complying with applicable laws,
regulations and procedures. In addition, the Executive consents to the Company processing sensitive
personal data (as defined by the Data Protection Act 1998) relating to him and in particular
relating to his physical and/or mental health or condition, trade union membership and racial or
ethnic origins, for the purposes set out above. The Executive further consents that the Company
may, when necessary for these purposes, make such data available to its advisers, to parties
providing products and/or services to the Company (including, without limitation, IT systems
suppliers, pension, benefits and payroll administrators), to regulatory authorities (including the
Inland Revenue) to any potential purchasers of the Company or its business and as required by law.
	 
	23.2  	The data which the Company holds (including any sensitive personal data) may, for the purposes
detailed in this clause, be transferred to other parts of the Group located in countries that do
not have data protection legislation equivalent to that in force in the United Kingdom and the
Executive consents to any such transfer.
	 
	23.3  	The Executive agrees that where, during his employment with the Company, he processes personal
data (whether relating to prospective, current or future employees of the Company at any time,
clients or customers of the Company or any persons) he will comply at all times with the Data
Protection Act 1998.
	 
	24.  	General 

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	24.1  	Prior agreements
	 
	   	This agreement sets out the entire agreement and understanding of the parties and is in
substitution for any previous contracts of employment or for services between the Company and the
Executive (which will be deemed to have been terminated by mutual consent).
	 
	24.2  	Accrued rights
	 
	   	The expiration or termination of this agreement however arising will not operate to affect
such of the provisions of this agreement as are expressed to operate or have effect after then and
will be without prejudice to any accrued rights or remedies of the parties.
	 
	24.3  	Proper law
	 
	   	The validity construction and performance of this agreement will be governed by English law.
	 
	24.4  	Collective Agreements
	 
	   	No collective agreement affects the terms and conditions of the Executive’s employment.
	 
	25.  	Miscellaneous 

	 	25.1  	This agreement is governed by and shall be construed in accordance with the laws of England.
	 
	 	25.2  	The parties to this agreement submit to the jurisdiction of the English courts.
	 
	 	25.3  	This agreement contains the entire understanding between the parties and supersedes all
previous agreements and arrangements (if any) relating to the employment of the Employee by the
Company (which shall be deemed to have been terminated by mutual consent).

	26.  	Notices 
	 
	26.1  	Any notice to be given by a party under this agreement must be in writing and must be given by
delivery at or sending first class post or facsimile transmission or other means of
telecommunication in permanent written form to the last known postal address or relevant
telecommunications number of the other party. Where notice is given by sending in a prescribed
manner it will be deemed to have been received when in the ordinary course of the means of
transmission it would be received by the addressee. To prove the giving of a notice it will be
sufficient to show it was dispatched. A notice will have effect from the sooner of its actual or
deemed receipt by the addressee.
	 
	27.  	Interpretation and Definitions 
	 
	27.1  	In this agreement:

	 	27.1.1  	the headings to the clauses and the index are for convenience only and have no legal effect;
	 
	 	27.1.2  	the singular includes the plural and vice versa;
	 
	 	27.1.3  	the masculine includes the feminine and vice versa;

13

 

	 	27.1.4  	reference to any Act or statutory provision includes any enactment modifying or replacing
it.

	27.2  	Company Invention means any improvement, invention or discovery made by the
Executive which applying the provisions of section 39 of the Patents Act 1977 in the determination
of ownership is, as between the parties, the property of the Company.
	 
	27.3  	Discovery means any invention, discovery, secret process, design improvement,
know-how, trademark or copyright, whether or not patentable or registrable, discovered, made
produced or created by the Executive (either alone or with any other person) while in the service
of the Company (whether before or after the commencement of this Agreement) in connection with or
in any way affecting or relating to the business of the Company or capable of being used or adopted
for use therewith.
	 
	27.4  	Confidential Business Information means all and any Corporate Information,
Marketing Information, Technical Information and other information (whether or not recorded in
documentary form or on computer disk or tape) to which the Company attaches level of
confidentiality commensurate to those forms of information or in respect of which it owes an
obligation of confidentiality to any third party:

	 	27.4.1  	which the Executive will acquire at any time during his employment by the Company but which
does not form part of the Executive’s own stock in trade; and
	 
	 	27.4.2  	which is not readily ascertainable to persons not connected with the Company either at all
or without significant expenditure of labour skill or money.

	27.5  	Corporate Information means all information (whether or not recorded in documentary
form or on computer disk or tape) relating to the business methods, corporate plans, management
systems, finances, maturing new business opportunities or research and development projects of the
Company.
	 
	27.6  	Customer means any person, firm, company or other organisation whatsoever to whom
the Company has supplied goods or services.
	 
	27.7  	Prospective Customer means any person, firm, company or other organisation
whatsoever with whom the Company has had any negotiations or discussions regarding the possible
supply of goods or services or to whom the Company has provided details of the terms on which it
would or might be willing to supply goods or services.
	 
	27.8  	Employee means any person who was employed by the Company and:

	 	27.8.1  	with whom the Executive had personal contact or dealings in performing his duties of
employment; or
	 
	 	27.8.2  	who reported to him; or
	 
	 	27.8.3  	who had material contact with Customers or suppliers of the Company in performing his duties
of employment with the Company.

	27.9  	Consultant means any person who provided services to the Company and was not an
Employee of the Company on the Termination Date.
	 
	27.10  	Restricted Area means EMEA.
	 
	27.11  	Marketing Information means all and any information (whether or not recorded in
documentary form or on computer disk or tape) relating to the marketing or sales of

14

 

any past, present or future product or service of the Company including without limitation
sales targets and statistics, market share and pricing statistics, marketing surveys and plans,
market research reports, sales techniques, price lists, discount structures, advertising and
promotional material, the names, addresses, telephone numbers, contact names and identities of
Customers and Prospective Customers of and suppliers and potential suppliers to the Company the
nature of their business operations, their requirements for any product or service sold to or
purchased by the Company and all confidential aspects of their business relationship with the
Company.

	27.12  	Material Interest means:

	 	27.12.1  	the holding of any position as director, officer, employee consultant, partner, principal
or agent; or
	 
	 	27.12.2  	the direct or indirect control or ownership (whether jointly or alone) of any shares (or
any voting rights attached to them) or debentures save for the ownership for investment purposes
only of not more than 3 per cent of the issued ordinary shares of any company whose shares are
listed on any Recognised Investment Exchange (as defined in Section 207 of the Financial Services
Act 1986); or
	 
	 	27.12.3  	the direct or indirect provision of any financial assistance.

	27.13  	Recognised Investment Exchange means any body of persons which is for the time being a
Recognised Investment Exchange for the purposes of the Financial Services Act 1986.
	 
	27.14  	Technical Information means all and any trade secrets, secret formulae, processes,
inventions, designs, know-how discoveries, technical specifications and other technical information
(whether or not recorded in documentary form or on computer disk or tape) relating to the creation,
production or supply of any past, present or future product or service of the Company.
	 
	27.15  	Termination Date means the date on which the Executive will cease to be employed
by the company.

	 	 	 
	/s/ Philip Vanhoutte

	 	4/7/03
	 

	 	 
	SIGNED
BY THE EXECUTIVE

	 	DATE
	 
	 	 
	/s/ Jean Claude Malraison

	 	3/7/03
	 

	 	 
	SIGNED
ON BEHALF OF THE COMPANY

	 	DATE

15<PAGE>

                                                                   EXHIBIT 10.35

                              SEPARATION AGREEMENT

THIS SEPARATION AGREEMENT between Access Pharmaceuticals, Inc., a Delaware
corporation (the "Company"), and Kerry Gray (hereinafter referred to as "Gray"),
dated as of May 10, 2005 (the "Effective Date");

WHEREAS, Gray is a member of the Board of Directors of the Company (the
"Board"), and President and Chief Executive Officer of the Company;

WHEREAS, Gray intends to resign and terminate his employment and all other
positions with the Company and its subsidiaries, including the offices of
President and Chief Executive Officer and Gray's membership on the Board;

WHEREAS, the Company intends to accept Gray's resignation and wishes to provide
to Gray certain payments and to provide Gray with certain other benefits upon
such termination and Gray agrees to give certain releases and provide certain
services to the Company;

NOW, THEREFORE, in consideration of the mutual promises set forth herein and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto hereby agree as follows:

1.    Resignation and Termination.

      1.1.  Gray hereby resigns from all positions he currently holds with the
            Company and any subsidiary of the Company, including without
            limitation the positions of President, Chief Executive Officer and
            Director, and member of the Board and any committee thereof,
            effective as of the Effective Date. Gray agrees to transfer any
            shares of any subsidiary or interest of any trust of the Company
            held by him as nominee or in any other capacity to the Company or
            its designee.

      1.2.  The Employment Agreement, dated as of April 1, 1998, by and between
            the Company and Gray is hereby terminated in its entirety as of the
            Effective Date and neither party thereto shall have any further
            rights or owe any further payment, duty or obligation to the other
            thereunder; notwithstanding the foregoing, (a) the non-competition
            obligation of Gray set forth in Section 7 of the Employment
            Agreement as it relates to (i) mucoadhesive film technology and (ii)
            products incorporating

<PAGE>

            platinum for use as a chemotherapeutic agent and (b) the
            non-solicitation obligation of Gray set forth in Section 8 of the
            Employment Agreement shall each survive for a period of one year
            from the date of this Agreement.

2.    Company Covenants.

      2.1.  Cash Payments. Commencing as of the Effective Date, Gray shall be
            entitled to the following cash payments:

            (a)   On the Effective Date, the Company shall pay to Gray a cash
                  payment of $225,000; and

            (b)   For a period of eighteen (18) months following the Effective
                  Date, the Company shall pay to Gray a payment of $33,333.33 on
                  the penultimate business day of each calendar month, with the
                  first such payment due and payable on May 30, 2005 making an
                  aggregate payment of $600,000 under this Section 2.1(b).

      2.2.  Common Stock Issuances. For a period of eighteen (18) months
            following the Effective Date, the Company shall issue to Gray 3,500
            shares of the Company's common stock on the penultimate business day
            of each calendar month, with the first such issuance due on May 30,
            2005 making an aggregate issuance of 63,000 shares under this
            Section 2.2. The Company agrees to register the resale of such
            shares on the next registration statement that it files for which
            registration of such resale is allowed by the rules of the
            Securities and Exchange Commission.

      2.3.  Vesting and Exercise of Existing Options and Restricted Stock. On
            the Effective Date, all outstanding Company stock options and shares
            of restricted stock of the Company held by Gray shall immediately
            and fully vest. All outstanding Company stock options held by Gray
            shall remain exercisable by Gray until June 30, 2007,
            notwithstanding anything to the contrary in documents related to
            such option grants, and shall expire on such date.

      2.4.  Consulting. At the Company's sole discretion, Gray and the Company
            hereby agree that, beginning on July 1, 2005 and thereafter, the
            Company may request that Gray serve the Company in the capacity of a
            consultant. The Company shall

                                       2

<PAGE>

            pay to Gray the sum of $2,000 for each day worked by Gray as a
            consultant at the request of the Company pursuant to this Agreement.
            From the Effective Date until July 1, 2005 Gray agrees to cooperate
            with the Company, at no cost to the Company, in connection with the
            transition of operations of the Company to a new Chief Executive
            Officer of the Company.

      2.5.  Benefits. For a period of Twenty (20) months following the Effective
            Date, the Company shall, at its sole expense, continue to maintain
            and provide coverage under Gray's existing health coverage plan. For
            a period of Twelve (12) months following the Effective Date, the
            Company shall, at its sole expense, provide outplacement services
            appropriate to Gray's position.

      2.6.  Withholding. All payments required to be made by the Company
            hereunder to Gray shall be subject to the withholding of such
            amounts, if any, relating to tax and other payroll deductions as the
            Company may reasonably determine it must withhold pursuant to any
            applicable law or regulation.

      2.7.  No Duty to Mitigate Damages. Gray's payments and benefits under
            Sections 2.1, 2.2, 2.3 and 2.5 of this Agreement shall be considered
            severance pay in consideration of his past service, and as an
            inducement to him to enter into and become bound by this Agreement,
            and his entitlement thereto shall not be dependent upon whether or
            not Gray provides further services of any type to or for the Company
            or any third party.

3.    Gray Covenants. Gray hereby covenants with the Company as follows:

      3.1.  Non-disclosure. Gray recognizes and acknowledges that he has had and
            will have access to certain highly sensitive, special, unique
            information of the Company that is confidential or proprietary. Gray
            hereby covenants and agrees not to use or disclose any Confidential
            Information (as hereinafter defined) except for disclosures made
            solely (i) to authorized representatives of the Company; or (ii) as
            required by any governmental, statutory or judicial authority,
            provided that prior to any such disclosure Gray shall provide the
            Company with notice of such requirement as is practicable and shall
            cooperate with the Company in responding to such requirement,
            including assisting the Company in procuring a protective order or
            other modification of such required disclosure.

                                       3

<PAGE>

      3.2.  Confidential Information. For purposes of this Agreement,
            "Confidential Information" means any data or information with
            respect to the business conducted by the Company that is material to
            the Company and not generally known by the public. To the extent
            consistent with the foregoing definition, Confidential Information
            includes without limitation; (i) reports, pricing, sales manuals and
            training manuals, selling and pricing procedures, and financing
            methods of the Company, together with any techniques utilized by the
            Company in designing, developing, manufacturing, testing or
            marketing its products or in performing services for clients,
            customers and accounts of the Company and (ii) the business plans
            and financial statements, reports and projections of the Company.

      3.3.  Return of Property. Gray covenants, agrees and acknowledges that all
            Confidential Information is and shall remain the sole, exclusive and
            valuable property of the Company and Gray has and shall acquire no
            right, title or interests therein. Any and all printed, typed,
            written or other material which Gray may have or obtain shall be and
            remain the exclusive property of the Company, and any and all
            material (including any copies) shall be promptly delivered by Gray
            to the Company. The Company acknowledges that the personal property
            listed on Exhibit B is and shall remain Gray's personal property
            unaffected by this Agreement

4. Indemnification. The Company shall indemnify Gray to the same extent provided
to its other directors and officers by its charter and by-laws against all
costs, charges and expenses, including, without limitation, attorneys' fees,
incurred or sustained by Gray in connection with any action, suit or proceeding
to which Gray may be made a party by reason of being an officer, director or
employee of the Company for acts undertaken from the time of his employment by
the Company through the Effective Date (the "Indemnification Period"), and Gray
will be included as an insured individual under any liability insurance policy
that insures other officers or directors of the Company for acts taken during
the Indemnification Period.

5.    Public Statement, Non-disparagement.

      5.1.  Gray and the Company shall make a press release announcing Gray's
            resignation in the form attached hereto as Exhibit A (the "Approved
            Public Statement") on the Effective Date. Neither Gray nor the
            Company shall make any public statement other

                                       4

<PAGE>

            than the Approved Public Statement or that is consistent with the
            Approved Public Statement.

      5.2.  Gray shall make no disparaging statements, whether public or
            private, with regard to the Company, its officers, employees, Oracle
            Partners or its affiliates or members of the Board unless and to the
            extent specifically compelled by any governmental agency or tribunal
            to make a statement.

      5.3.  The Company and the members of the Board shall make no disparaging
            statements, whether public or private, about Gray unless and to the
            extent specifically compelled by any government agency or tribunal
            to make a statement. In response to an inquiry, or as necessary or
            appropriate to make clear Gray's status with the Company or the
            circumstances of his departure, the Company and the members of the
            Board shall inform third parties that Gray is a shareholder of the
            Company and/or that he is not an employee, officer, director or
            other agent of the Company by saying that Gray remains a shareholder
            of the Company and that Gray resigned voluntarily, or other words of
            similar effect. Neither the Company nor the members of the Board
            shall make any statement that implies or suggests that the reason
            for Gray's separation from the Company was anything other than
            Gray's voluntary action.

6.    Mutual Release and Covenant Not to Sue.

      6.1   Release and Covenant Not to Sue from Gray.

            (a)   Release. Gray hereby releases each of the Company and its
                  officers, employees, directors, shareholders (in their
                  capacities as such), attorneys, agents, successors, and
                  assigns, from each and every right, claim, debt, demand,
                  liability, cost, expense, and/or cause of action, which he has
                  or may have had against any of such released parties as of the
                  Effective Date, whether known or unknown.

            (b)   Covenant Not to Sue. Gray hereby covenants and agrees not to
                  bring suit against any of the Company or any of its officers,
                  employees, directors, attorneys, agents, successors, and
                  assigns based upon any claim herein released.

                                       5

<PAGE>

            (c)   Rights Retained. Notwithstanding anything in this Agreement to
                  the contrary, Gray expressly reserves his right to take action
                  against the Company to preserve his rights under this
                  Agreement in the event of a breach thereof by the Company,
                  subject to Section 7 below.

      6.2   Release and Covenant Not to Sue from the Company.

            (a)   Release. The Company hereby releases each of Gray and his
                  attorneys, agents, successors, and assigns from each and every
                  right, claim, debt, demand, liability, cost, expense, and/or
                  cause of action arising out of Gray's service or status as an
                  employee, officer, director, shareholder (in his capacity as
                  such) or representative of shareholders of the Company,
                  existing as of the Effective Date and whether known or
                  unknown.

            (b)   Covenant Not to Sue. The Company hereby covenants and agrees
                  not to bring suit against each of Gray and his attorneys,
                  agents, successors, and assigns based upon any claim herein
                  released.

            (c)   Rights Retained. Notwithstanding anything in this Agreement to
                  the contrary, the Company expressly reserves its right to take
                  action against Gray to preserve its rights under this
                  Agreement in the event of a breach thereof by Gray, subject to
                  Section 7 below.

7.    Arbitration. Any controversy or claim arising out of or relating to this
      Agreement, or the breach thereof, shall be settled exclusively by
      single-arbitrator arbitration, in Dallas, Texas, in accordance with the
      Commercial Arbitration Rules of the American Arbitration Association then
      in effect, and judgment upon the award rendered by the arbitrator may be
      entered in any court having jurisdiction thereof.

8.    Collateral. Payments owed to Gray by the Company pursuant to Section 2
      hereof shall be secured by, and the Company hereby grants to Gray a
      security interest in and to, all of the assets of the Company, ranking
      junior only to the security interest granted to Cornell Capital Partners,
      LP and Highgate House Funds, Ltd. Any failure to pay timely any amount due
      under Section 2.1(b) shall result, automatically, in the full acceleration
      of all such payments not yet paid in full if such amount due is not paid
      within 10 days after written notice from Gray. With respect to the
      Company, any commencement of

                                       6

<PAGE>

      a bankruptcy proceeding, assignment for the benefit of creditors or the
      appointment of a receiver, trustee, liquidator or other similar official
      shall also result, automatically, in the full acceleration of all such
      payments not yet paid in full.

9.    Legal Fees and Expenses. Each party hereto shall pay its own legal fees
      and expenses of counsel reasonably incurred by such party in connection
      with the negotiation, execution and delivery of this Agreement or in
      seeking in good faith to obtain any right or benefit to which such party
      believes it or he is entitled under this Agreement. In the event of a
      default by the Company with respect to any payments owed to Gray under
      this Agreement, the Company agrees to pay Gray any costs of collection,
      including but not limited to any reasonable attorneys fees, which shall be
      deemed additional payments that are secured pursuant to Section 8 hereto.

10.   Notices. Any notices required to be given under this Agreement shall be in
      writing and shall be deemed given three (3) days after mailing in the
      continental United States by registered or certified mail, or upon
      personal receipt after delivery, telex, telecopy, or telegram, to the
      party entitled thereto at the address stated below or to such changed
      address as the addressee may have given by a similar notice:

      To the Company:  Access Pharmaceuticals, Inc.
                       2600 Stemmons Freeway, Suite 176
                       Dallas, TX 75207-2107
                       Attn: Chief Executive Officer

      With a copy to:  John J. Concannon III, Esq.
                       Bingham McCutchen LLP
                       150 Federal Street
                       Boston, MA 02110

      To Gray:         Kerry Gray

11.   General Provisions.

      11.1. Binding Agreement. This Agreement shall be binding upon and inure to
            the benefit of Gray and be enforceable by his personal or legal
            representatives or successors. If Gray dies while any amounts would
            still be payable to him hereunder, his rights herein shall still be
            exercisable by such representatives or

                                       7

<PAGE>

            successors. Such amounts shall be paid to Gray's estate in
            accordance with the terms of this Agreement. This Agreement shall
            not otherwise be assignable by Gray.

      11.2. Successors. This Agreement shall inure to and be binding upon the
            Company's successors. The Company shall require any successor to all
            or substantially all of its business and/or assets by sale, merger
            (where the Company is not the surviving corporation), consolidation,
            lease or otherwise, by agreement in form and substance satisfactory
            to Gray, to assume this Agreement expressly. This Agreement shall
            not otherwise be assignable by the Company.

      11.3. Amendment or Modification; Waiver. This Agreement may not be amended
            or modified unless agreed to in writing by Gray and the Company. No
            waiver by either party of any breach of this Agreement shall be
            deemed a waiver of any subsequent breach.

      11.4. Severability. In the event that any provision of this Agreement
            shall be determined to be invalid or unenforceable, such provision
            shall be enforceable in any jurisdiction in which valid and
            enforceable, and in any event the remaining provisions shall remain
            in full force and effect to the fullest extent permitted by law.

      11.5. Rights Granted. This Agreement shall not give Gray any right to
            compensation or benefits from the Company or any affiliate of the
            Company, except for the rights specifically stated herein, including
            those certain severance and other benefits that become payable on or
            after the Effective Date.

      11.6. Governing Law. The validity, interpretation, performance, and
            enforcement of this Agreement shall be governed by and construed in
            accordance with the internal laws of the State of Delaware, without
            giving effect to the principles of choice of law or conflicts of
            law.

      11.7. Counterparts. This Agreement may be executed in multiple
            counterparts, each of which shall be deemed an original, but all of
            which taken together shall constitute one and the same Agreement.

      11.8. Section Headings. The descriptive section headings in this Agreement
            have been inserted for convenience of reference only

                                       8

<PAGE>

            and are not intended to be part of, or to affect the meaning or
            interpretation of, this Agreement.

12.   Exclusive Agreement. It is agreed and understood that this Agreement
      represents the entire agreement between the Company and Gray concerning
      the subject matter hereof and supersedes all prior agreements and
      understandings concerning Gray's rights upon the termination of his
      employment.

      IN WITNESS WHEREOF, the parties hereto have executed this Agreement under
seal as of the day and year first above written.

ACCESS PHARMACEUTICALS, INC.                         KERRY GRAY

/s/ Michael Flinn                                    /s/ Kerry Gray
-------------------------------------------          ---------------------------
Name: Michael Flinn
Title: Chairman of the Board of Directors

                                       9

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