Employment Agreement, dated February 27, 2024, between Incannex Healthcare Inc. and Joseph Swan

Engagement

Incannex Healthcare Inc (IXHL) agrees to employ you to perform the duties as outlined in your position as Chief Financial Officer and any associated performance agreements, which fall within your position scope and outlined in your job description.

Subject to the relevant laws, this employment contract (referred to as ‘Contract’) constitutes your entire contract of employment with IXHL.

It supersedes any prior understanding or employment Contract between you and IXHL and/or its subsidiary companies.

Exclusivity

The terms of the contract are open ended and will remain in force until termination by either the Employer or Employee. Termination arrangements are defined in Clause 9.

During the term of your employment, you will do the following:

1.    Faithfully and diligently perform the duties and exercise the powers consistent with the position that may be assigned to them by IXHL.

2.    Comply with all reasonable directions given by IXHL.

3.    Observe and comply with the provisions set out in any existing written policy, practice or procedure circulated by IXHL.

4.    Use your best endeavours to promote the interests of IXHL.

5.    Protect the property of IXHL from theft, loss, damage, or neglect and without delay give notice immediately to the Company of any theft, loss, damage or neglect of that property which may come to your knowledge.

The normal hours of work will be a minimum of 40 hours per week to be worked flexibly between the hours of 7am and 7pm Monday to Friday.

As this is a professional role you may be required to work outside these hours as reasonably necessary to perform the work.

Adherence to IXHL Policies
and Procedures

You will be paid a base of $205,000 per annum, fixed reward as shown in Schedule 1, with your base salary payable in equal fortnightly instalments.

1.    Your Fixed Reward will be exclusive of the Superannuation Guarantee Charge (SGC) of 11% of base salary which will be paid in line with legislation changes as and when it is enacted.

2.    In addition, the SCG and any employee contributions made as salary sacrifice can be made each calendar quarter to an approved superannuation fund.

1.    Your Fixed Reward will be reviewed annually in line with your performance and movements in the market.

2.    Any salary review will take place from 1 July each year.

Short Term Incentive

(STI)

1.    You will be eligible to participate in a STI of up to 20% of your Fixed Remuneration.

2.    Payment of the STI will be subject to profitability and other hurdles.

3.    Your reward in the STI will be based on achievement of your written performance plan provided to you by your manager on an annual basis.

4.    Your performance plan will contain Key Performance Indicators (KPI’s) and Targets as well as behavioural requirements.

5.    Your specific payment will also be subject to the market benchmark for your role.

6.    The STI will commence in the financial year 2021-2022 and will be based on a pro rata calculation for length of employment over the 12-month period.

Long Term Incentive

(LTI)

1.    You will be entitled to participate in a Long-Term Incentive Plan (LTI). This will be provided in the form a 10B5-1 plan.

2.    It will be developed in alignment with the company constitution and Government taxation regulations.

3.    You will be notified of this plan when it has cleared all required hurdles.

1.    You will comply with IXHL’s Travel and Business Expense policies as determined by the Board and/or its approved committees from time-to-time.

2.    IXHL will reimburse you for all reasonable and proper expenses incurred by you in carrying out your duties in accordance with this Contract.

1.    You will be provided with 20 days paid annual leave per annum which can be taken in accordance with IXHL policy.

2.    No more than 2 year’s annual leave can be accrued at any one time.

3.    Annual Leave will be taken to suit both the ongoing business requirements and your preferences.

1.    You will be provided with up to 10 days sick leave per annum which does not accumulate, nor will it be paid out on departure.

2.    In the case of any long-term sickness, leave will be given at the discretion of the President.

At the discretion of the Chairman, you may be granted special leave for other purposes than those described above.

You will not without prior written consent of IXHL, disclose or use any confidential information of any kind concerning the business, affairs or customs of IXHL which may come to your knowledge, except:

Disclose or use in the proper course of your duties;

Information which is freely available to the public;

●     To the extent you are required to disclose information by law or requirement of any regulatory body.

●     The obligations under this clause survive the termination of this Contract for a period of 12 months.

You will acknowledge that copyright in any original material created by you in the course of your duties will vest with IXHL.

1.   IXHL agrees to comply with State and Commonwealth Occupational Health & Safety (OH&S) laws and any relevant industry codes of practice.

2.    You will agree to carry out any instructions, policies and decisions made to promote and maintain a safe workplace required by relevant OH&S legislation, including any further requirements specific to the employer’s industry and workplace – even if not specified in the legislation.

3.    Smoking is not permitted in any of the work areas.

4.    IXHL requires that you not be affected by alcohol or illegal drugs during working hours for your own safety and for that of others.

5.    If you are temporarily under medication or any condition that may affect or limit your ability to carry out normal job tasks, you are to advise IXHL and, if required, alternative work arrangements may be made.

During the life of this employment contract if IXHL or you are in dispute with one another then the following process is agreed to:

Step 1 – You and the CEO

Both an IXHL manager and you agree to attempt to resolve the matter at the workplace level by meeting and discussing the matter.

Step 2 – You and the Board

If the matter is not settled at such a meeting, you may arrange further discussions involving the full Board members.

Both parties agree to the right of IXHL or you to appoint, in writing, another person to represent, or assist in settling the matter at the workplace level.

Step 3 – External mediation

If the matter cannot be resolved at the workplace level, then if both parties agree, a dispute may be referred to mediation by a mutually agreed independent person or organisation.

If a matter is referred to mediation, both parties must participate in the mediation process in good faith and a willingness to settle.

1.    During any of the steps above IXHL and you will continue to work according to the employment contract unless you have a ‘reasonable concern’ about an immediate risk to your health or safety.

2.    Even with this ‘reasonable concern’ but subject to relevant provisions of any State or Territory occupational health and safety law, you must not unreasonably fail to comply with an instruction by IXHL to perform other available work.

3.    Available work may be at the same workplace or another reasonably accessible workplace. Such work must be safe and appropriate for you to perform.

4.    During the term of the dispute, the parties agree not to commence legal action unless the party commencing the action has genuinely attempted to settle the dispute at the workplace level.

Step 1: Discussion and First Warning

1.    If IXHL is concerned about your work performance or conduct, a manager will meet with you and explain their concerns to you.

2.    The manager will advise you, in writing, of the standard of work or behaviour that is required and discuss ways and methods to improve your work and/or conduct.

3.    The manager and you will sign and date this written document.

4.    This written warning will be placed on your personnel file.

5.    The manager will then provide you with a reasonable period of time to reach an acceptable work performance or conduct and you will be warned that your employment will be ended if acceptable performance levels or appropriate behaviour are not reached.

Step 2: IXHL Feedback on Progress and Second Warning

1.    During the set period, the manager will discuss with you whether there has been any improvement and, if necessary, to further warn you, in writing, that your employment will end if that improvement is not reached.

2.    Again, the manager and you will sign and date this written document.

Step 3: Termination

If your performance or behaviour has not improved after the 2 meetings and the written warnings above a senior manager will work towards terminating your employment.

IXHL may terminate your employment if your performance or behaviour is unsatisfactory by giving you notice. The general procedure outlined in Clause 8.1 of this contract will be adhered to before termination of employment is considered.

1.    IXHL may pay you in lieu of the required period of notice. Such payment will be calculated on your Fixed Reward in Schedule 1.

2.    If you resign from IXHL’s employment you must give a minimum of 3 month’s notice.

IXHL may immediately terminate this Contract, in writing and without any notice period or payment, where you:

●     Commit any serious breach of this Contract, including, without limitation, intentional disobedience, dishonesty, serious or persistent breach of duty or serious or persistent neglect;

●     Materially breach this Contract and do not remedy that breach within an acceptable time after receiving written notice from the IXHL specifying the breach;

●     Become of unsound mind or whose person or estate is liable to be dealt with in any way under the laws relating to mental health;

●    Are convicted of a criminal offence, which, in the reasonable opinion of IXHL, will detrimentally affect the Company.

At IXHL’s discretion, you may be given 14 days to rectify the breach before termination is considered.

If your employment is terminated by IXHL under Clauses 9.1 and 9.2, the company will not be obliged to pay the employee any monies other than the following:

●      Any accrued salary to which you are entitled on the date your employment is terminated.

●     You will be paid your required notice period and it may be paid in lieu if you have been terminated because of performance or behaviour. Such payment will be calculated on your Fixed Reward in Schedule 1

●      You will not be paid any notice period if a serious breach has been determined.

●       Any amount to which you may be entitled in lieu of unused annual leave;

●       Any amount to which you are entitled under the state long service leave legislation.

If IXHL terminates your employment as per clause 9 you will be subject to the following restraints on your future employment:

There will be a 3-month restraint period where you must not:

1.    Solicit, canvas, approach or accept any approach from any person who was at any time during your last 12 months with IXHL a client of the company in that part or parts of the business in which you were employed, with a view to obtaining the custom of that person in a business that is the same or similar to the business conducted by IXHL; or

2.    Interfere with the business or employment relationship between IXHL and its customers, employees or suppliers.

3.    Other than the obligation for payment determined under the relevant items in clause 9, IXHL is under no obligation to make any additional payment in respect of the restraint period of this clause 10

4.    IXHL reserves the absolute right to waive such restraint terms

If you voluntarily resign from IXHL employment as per clause 9:

1.    The restraint terms of Clause 10.1 (1) to 10.1 (4) above will apply during the notice period; and

2.    During the 3 month restraint period you must not engage or prepare to engage in any business or activity that is the same or similar to that part or parts of the business carried on by IXHL in which you were employed at any time during your last 12 months of employment with IXHL; and

3.    the restraint period will run concurrently with the notice period.

You will be paid $205,000 per annum Fixed Reward, with your base salary payable in equal fortnightly instalments.

1.   Your Fixed Reward will be exclusive of the Superannuation Guarantee Charge (SGC) of 11% of base salary which will be paid in line with legislation changes as and when it is enacted.

2.    Both the SGC contribution and any other employee contributions can be salary sacrificed, monthly, into an approved superannuation fund.

1.    Your Fixed Reward will be reviewed in line with your performance and movements in the market.

2.    Any salary review will take place from 1 July each year.

Short Term Incentive

(STI)

1.    You will be eligible to participate in an STI of up to 20% of your Fixed Remuneration.

2.    Payment of the STI will be subject to profitability and other hurdles.

3.    Your reward in the STI will be based on achievement of your written performance plan provided to you by your manager on an annual basis.

4.    Your performance plan will contain Key Performance Indicators (KPI’s) and Targets as well as behavioural requirements.

5.    Your specific payment will also be subject to the market benchmark for your role.

6.    The STI will commence in the FY24 and will be determined using a pro rata basis for the time of employment over the 12-month period.

Long Term Incentive

(LTI)

1.    You will be entitled to participate in a Long-Term Incentive Plan (LTI).

2.    The LTI will be a share-based plan to the value $200,000, the value of shares will vest over a period of time, the finalisation of the issue of equity will form part of the establishment of the 10B5-1 plan.

3.    It will be developed in alignment with the company constitution and Government taxation regulations.

4.    You will be notified of this plan when it has cleared all required hurdles.