Cellmid 2018 Annual Report 25
Service agreements
The remuneration of the Chief Executive Officer, Maria Halasz, reflects the activities of the two business units, Consumer Health
Business and Midkine Business, within the Group.
On 1 July 2016 a service agreement was signed between the Group and Maria Halasz. Pursuant to this service agreement Maria
Halasz’s salary component with the Group was reduced, and two consulting agreements, one with Lyramid Limited and one with
Advangen Limited, were signed by Direct Capital Group Pty Ltd, a company associated with Ms Halasz.
The above arrangement is covered under one service agreement and the conditions are as follows:
The remuneration for Ms Halasz is fixed, however, at the discretion of the Board and subject to prior approval by shareholders,
she may receive performance based incentives in the future.
The duration of the service agreement is 3 years.
No leave and superannuation entitlement accrue in relation to the consulting agreements with Direct Capital Group Pty Ltd.
Ms Halasz may resign from her position and thus terminate the service agreement, including the consulting agreements with
Direct Capital Group Pty Ltd, by giving six months’ written notice. On resignation any unvested options will be forfeited.
The Group may terminate the employment agreement, including the consulting agreements with Direct Capital Group Pty Ltd,
by providing six months’ written notice or providing payment in lieu of the notice period (based on the fixed component of Ms
Halasz’s remuneration).
The Group may terminate the contract at any time without notice if serious misconduct has occurred. Where termination with
cause occurs, the CEO is only entitled to that portion of remuneration which is fixed, and only up to the date of termination.
The service agreement was amended in July 2017 to extinguish the accrued leave liability of Ms Halasz. The consulting fee
was increased by $155,077 and was paid between the period of 15 July 2017 and 15 April 2018. Following this period, the
consulting fee returned as per the original agreement dated 1 July 2016.
Equity-based compensation
No equity-based compensation in the form of options over ordinary shares were issued during the year ended 30 June 2018.
On 25 November 2013, 12,000,000 loan shares were granted to Maria Halasz in three equal tranches under the Cellmid
Limited and Controlled Entities Employee Incentive Plan and as approved by shareholders at the annual general meeting on 22
November 2013. Ordinary shares were issued under the arrangement funded by a limited recourse loan with the following vesting
conditions attached:
Tranche Vesting date Shares Shares Vesting
Pre Post Conditions
Consolidation Consolidation*
1 25/11/2016 4,000,000 200,000 Shares will vest at any time before the vesting date
when the Group’s operating revenue reaches a total of
$4,000,000 over any consecutive 12 months. The fair
value at the date of grant was $73,200.
The conditions in relation to this tranche have been met.
2 25/11/2016 4,000,000 200,000 Shares will vest at any time before the vesting date
subject to the first patient being recruited into the
Group’s planned midkine antibody trial. The fair value
at the date of grant was $73,200.
The conditions in relation to this tranche were not met.
3 25/11/2016 4,000,000 200,000 Shares will vest at any time before the vesting
date subject to the signing of one of the following
agreements for the Group’s consumer health products
in a territory outside of Australia and Japan:
(a) a diagnostic or therapeutic licence; or
(b) a distribution agreement.
The fair value at the date of grant was $73,200.
The conditions in relation to this tranche have been met.
*On 23 November 2017, the Group completed a twenty to one share consolidation.