Employment, Confidential Information and Invention Assignment Agreement - SuperGen Inc. and Joseph Rubinfeld
SUPERGEN, INC.
AMENDED AND RESTATED
EMPLOYMENT, CONFIDENTIAL INFORMATION AND
INVENTION ASSIGNMENT AGREEMENT
This Amended and Restated Employment, Confidential Information and
Invention Assignment Agreement is made as of January 1, 1998 by and between
SuperGen, Inc., a Delaware corporation (the "Company"), and Joseph Rubinfeld
("Executive").
RECITALS
A. The Company and Executive are parties to that certain Employment,
Confidential Information and Invention Assignment Agreement, dated as of
January 1, 1994 (the "Employment Agreement"), as amended by Amendment No. 1
dated January 17, 1996, subject to the terms and conditions of which the
Company employs Executive and Executive accepts employment.
B. The Company and Executive wish to amend and restate the Employment
Agreement upon the terms set forth below.
1. TERM. The Company hereby employs Executive and Executive hereby
accepts employment, on the terms and conditions set forth herein. The term
of this Agreement shall commence on January 1, 1994 and shall continue for a
period of six (6) years thereafter until December 31, 1999.
2. DUTIES. Executive agrees to serve the Company as its President and
Chief Executive Officer, or in such other executive capacity as the Company's
Board of Directors (the "Board") may from time to time request. During the
term of this Agreement, Executive will devote all of his normal business time
and attention to, and use his best efforts to advance, the business of the
Company. Executive agrees not to actively engage in any other employment,
occupation or consulting activity for any direct or indirect remuneration
without the prior approval of the Board, except that without such prior
approval Executive may serve on the board of directors of other companies if
in so doing Executive does not violate the terms of this Agreement.
3. COVENANT NOT TO COMPETE. Executive agrees that if his employment
with the Company terminates at any time prior to December 31, 1999 he will
not, prior to December 31, 1999, individually or with any other person or
organization, directly or indirectly, in any city or county of California, or
in any or all of the states in the United States, or in any or all countries
in the world in which the Company's business has been carried on or in which
customers of the Company are located, enter into or engage in the research,
engineering, design, manufacture and/or sale of any product or product line
which may directly compete with the products or product lines of the Company
(either produced prior to the time of such termination or being actively
developed at such time) or engage in any other activity in direct competition
with the Company. For purposes thereof, Executive shall be deemed to be
engaging in the research, engineering, design, manufacture and/or
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sale of said product or product line or in any other direct activity in
competition with the Company if, and only if, (a) he engages in any
consulting activities or any employment relationship relating to products
directly being worked upon by the Company, or (b) he, as an individual or
sole proprietorship, a partnership or limited partnership of which he is a
general partner or a limited partner with direct or indirect interest in five
percent (5%) or more of the profits or gains of such partnership, or a
corporation in which he owns directly or indirectly five percent (5%) or more
of the outstanding voting securities (which shall include any security or
option convertible into or exercisable for voting securities), engages in the
research, engineering, design, manufacture and/or sale of said products or
product lines or engages in any other activity in direct competition with the
Company in any of said counties, states or countries. For purposes of this
covenant not to compete, "product and product lines" referred to herein shall
mean generic drugs, "Extra" drugs (as described on the Product Schedule
attached to the Stock Purchase Agreement dated January 21, 1994 between the
Company, Israeli Chemicals, Ltd., Joseph Rubinfeld, Elliott L. Fineman,
David M. Fineman and J. Gregory Swendsen (the "Product Schedule")) or any
other project in commercial development or offered for sale by the Company
during the term of Executive's employment by the Company, including without
limitation, all Products on the Product Schedule.
With regard to a termination as described above, Executive
understands and agrees that this covenant not to compete with the Company
shall be applicable and binding upon him for the period set forth above
without regard to the grounds for termination of his employment, if any, and
without regard to whether such termination shall have been voluntary or
involuntary.
4. CONFIDENTIAL INFORMATION.
(a) COMPANY INFORMATION. Executive agrees at all times during the
term of his employment and thereafter, to hold in strictest confidence, and
not to use, except for the benefit of the Company, or to disclose to any
person, firm or corporation without written authorization of the Board, any
Confidential Information of the Company. Executive understands that
"Confidential Information" means any Company proprietary information,
technical data, trade secrets or know-how, including, but not limited to,
research, product plans, products, services, customer lists and customers
(including, but not limited to, customers of the Company on whom Executive
called or with whom Executive became acquainted during the term of
employment), markets, software, developments, inventions, processes,
formulas, technology, designs, drawings, engineering, hardware configuration
information, marketing, finances or other business information disclosed to
Executive by the Company either directly or indirectly in writing, orally or
by drawings or observation of parts or equipment. Executive further
understands that Confidential Information does not include any of the
foregoing items which have become publicly known and made generally available
through no wrongful act of Executive or of others who were under
confidentiality obligations as to the item or items involved.
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(b) FORMER EMPLOYER INFORMATION. Executive agrees that he will
not, during the period of employment with the Company, improperly use or
disclose any proprietary information or trade secrets of any former or
concurrent employer or other person or entity and will not bring onto the
premises of the Company any unpublished document or proprietary information
belonging to any such employer, person or entity unless consented to in
writing by such employer, person or entity.
(c) THIRD PARTY INFORMATION. Executive recognizes that the
Company has received and in the future will receive from third parties their
confidential or proprietary information subject to a duty on the Company's
part to maintain the confidentiality of such information and to use it only
for certain limited purposes. Executive agrees to hold all such confidential
or proprietary information in the strictest confidence and not to disclose it
to any person, firm or corporation or to use it except as necessary in
carrying out work for the Company consistent with the Company's agreement
with such third party.
(d) INVENTIONS.
(i) INVENTIONS RETAINED AND LICENSED. Executive has attached
hereto, as EXHIBIT A, a list describing all inventions, original works of
authorship, developments, improvements, and trade secrets which were made by
Executive prior to employment with the Company (collectively referred to as
"Prior Inventions"), which belong to Executive, which relate to the Company's
proposed business, products or research and development, and which are not
assigned to the Company hereunder; or, if no such list is attached, Executive
represents that there are no such Prior Inventions. If in the course of
employment with the Company, Executive incorporates into a Company product,
process or machine a Prior Invention owned by Executive or in which Executive
has an interest, the Company is hereby granted and shall have a nonexclusive,
royalty-free, irrevocable, perpetual, worldwide license to make, have made,
modify, use and sell such Prior Invention as part of or in connection with
such product, process or machine.
(ii) ASSIGNMENT OF INVENTIONS. Executive agrees to promptly
make full written disclosure to the Company, will hold in trust for the sole
right and benefit of the Company, and hereby assigns to the Company, or its
designee, all right, title, and interest in and to (i) any and all
inventions, original works of authorship, developments, concepts,
improvements or trade secrets, whether or not patentable or registrable under
copyright or similar laws, which Executive may solely or in collaboration
with others perfect, devise, conceive or develop or reduce to practice, or
cause to be conceived or developed or reduced to practice, during the period
of time in the employ of the Company (collectively referred to as
"Inventions") and, (ii) for a period of one year after termination of
employment, any invention relating directly to the products of the Company or
resulting from any work performed by Executive for the Company with the
Company's Confidential Information, except as provided in Section 4(d)(vi)
below. Executive further acknowledges that all original works of authorship
which are made by Executive (solely or jointly with others) within the scope
of and during the period of employment with the Company and which are
protectible by copyright are "works made for hire," as that term is defined
in the United States Copyright Act.
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(iii) INVENTIONS ASSIGNED TO THE UNITED STATES. Executive
agrees to assign to the United States government all right, title, and
interest in and to any and all Inventions whenever such full title is
required to be in the United States by a contract between the Company and the
United States or any of its agencies.
(iv) MAINTENANCE OF RECORDS. Executive agrees to keep and
maintain adequate and current written records of all Inventions made by
Executive (solely or jointly with others) during the term of employment with
the Company. The records will be in the form of notes, sketches, drawings,
and any other format that may be specified by the Company. The records will
be available to and remain the sole property of the Company at all times.
(v) PATENT AND COPYRIGHT REGISTRATIONS. Executive agrees to
assist the Company, or its designee, at the Company's expense, in every
proper way to secure the Company's rights in the Inventions and any
copyrights, patents or other intellectual property rights relating thereto in
any and all countries, including the disclosure to the Company of all
pertinent information and data with respect thereto, the execution of all
applications, specifications, oaths, assignments and all other instruments
which the Company shall deem necessary in order to apply for and obtain such
rights and in order to assign and convey to the Company, its successors,
assigns, and nominees the sole and exclusive rights, title and interest in
and to such Inventions, and any copyrights, patents or other intellectual
property rights relating thereto. Executive further agrees that his
obligation to execute or cause to be executed, when it is in Executive's
power to do so, any such instrument or papers shall continue after the
termination of this Agreement. If the Company is unable because of his
mental or physical incapacity or for any other reason to secure Executive's
signature to apply for or to pursue any application for any United States or
foreign patents or copyright registrations covering Inventions or original
works of authorship assigned to the Company as above, then Executive hereby
irrevocably designates and appoints the Company and its duly authorized
officers and agents as Executive's agent and attorney in fact, to act for and
in Executive's behalf and stead to execute and file any such applications
and to do all other lawfully permitted acts to further the prosecution and
issuance of patent or copyright registrations thereon with the same legal
force and effect as if executed by Executive.
(vi) EXCEPTION TO ASSIGNMENTS. Executive understands that
the provisions of this Agreement requiring assignment of Inventions to the
Company do not apply to any invention which qualifies fully under the
provisions of California Labor Code Section 2870 (attached hereto as
EXHIBIT B). Executive will advise the Company promptly in writing of any
inventions that Executive believes meet the criteria in California Labor Code
Section 2870 and not otherwise disclosed on EXHIBIT A.
5. COMPENSATION AND FRINGE BENEFITS.
(a) The Company shall pay Executive an annual salary equal to at
least the sum of one hundred and fifty thousand dollars ($150,000) commencing
January 1, 1994, two hundred and fifty thousand dollars ($250,000) commencing
January 17, 1996, and three hundred and fifty
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thousand dollars ($350,000) commencing October 1, 1997, payable in equal
installments on the regular employee payroll dates of the Company.
Executive's annual salary shall be adjusted on each one-year anniversary of
the date of this Agreement to compensate for changes in the cost of living.
The amount of each annual cost of living increase shall be twice the rate
determined for such annual period by the "Consumer Price Index for Urban Wage
Earners and Clerical Workers (All Items) published by the Bureau of Labor
Statistics, U.S. Department of Labor (1967 equals 100)." Commencing January
1, 1996, the Executive shall be paid an annual performance bonus equal to at
least the sum of sixty thousand dollars ($60,000). Executive shall also be
paid such additional salary or other incentive compensations as the
compensation committee of the Board (the "Compensation Committee") may, in
its sole discretion, determine from time to time.
(b) Executive shall be entitled to participate in such group life,
pension, disability, accident, hospital and medical insurance plans, and such
other plan or plans which may be instituted by the Company for the benefit of
its executive employees generally, upon such terms as may be therein provided
of general application to all executive employees of the Company and such
other benefits as are mutually deemed appropriate to the position held by
Executive and to the discharge of Executive's duties. Executive shall be
entitled to not less than twenty (20) business days' vacation per year, with
remuneration, which shall be coordinated with the vacation periods of other
officers of the Company in a manner that will minimize disruption of the
Company's management efforts.
(c) The Company shall issue to Executive a stock option to
purchase up to 500,000 shares of the Company's Common Stock effective January
17, 1996 at an exercise price equal to the greater of $5.50 or the initial
public offering price per share of the Company's Common Stock. Such option,
which shall become exercisable as to 25% of the shares subject to the option
immediately upon closing of the company's initial public offering and an
additional 1/36th of the remaining shares subject to the option becoming
exercisable at the end of each month thereafter and full vesting occurring on
the third anniversary of the date of grant, shall be pursuant to the terms
and conditions contained in the standard Company stock option agreement,
which has been delivered to Executive, except the term of such options shall
be 5 years. Additionally, on the condition of a change of control of the
Company or that all warrants issued in connection with the initial public
offering units are exercised or redeemed, the Executive's stock option to
purchase up to 500,000 shares of the Company's Common Stock shall immediately
become fully exercisable.
6. EXPENSES. The Company will pay or reimburse Executive for
reasonable travel, entertainment or other expenses incurred by Executive in
the furtherance of or in connection with the performance of Executive's
duties hereunder in accordance with the Company's established policies.
Executive shall furnish the Company with evidence of the incurrence of such
expenses within a reasonable period of time from the date that they were
incurred.
7. TERMINATION WITHOUT CAUSE. Executive's employment hereunder may be
terminated by the Company, without cause, at any time during the term hereof
upon thirty (30) days advance written notice from the Board; provided,
however, that in the event of a termination without cause, Executive shall
continue to receive from the Company the full amount and scope of
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compensation and benefits described in Section 5 hereof until December 31,
1999. For purposes of this Agreement, Executive's death, disability or any
other termination, other than a voluntary termination by Executive or
termination for cause (as defined in Section 8), shall be deemed to be a
termination without cause.
8. TERMINATION FOR CAUSE. Executive's employment hereunder may be
terminated at any time during the term of this Agreement by the Company for
"cause." The term "cause" is defined as any one or more of the following
occurrences:
(a) Executive's conviction by, or entry of a plea of guilty or
nolo contendere in, a court of competent and final jurisdiction for any crime
which constitutes a felony in the jurisdiction involved, which conviction or
plea materially injures the Company; or
(b) Executive's commission of an act of fraud or misappropriation
of funds, whether prior to or subsequent to the date hereof, upon the
Company; or
(c) Gross negligence by Executive in the scope of Executive's
employment resulting in a material injury to the Company, violation by
Executive of any duty of loyalty to the Company resulting in a material
injury to the Company, or any other misconduct on the part of Executive
resulting in a material injury to the Company.
Notwithstanding the foregoing, Executive shall not be deemed to
have been terminated for cause without (i) reasonable notice to Executive
setting forth the reasons for the Company's intention to terminate for cause,
and (ii) an opportunity for Executive, together with his counsel, if any, to
be heard before the Board.
If Executive's employment hereunder shall be terminated by the
Company pursuant to this Section 8, except as set forth in Section 17, this
Agreement shall terminate as of the date of such termination of employment
and Executive shall then not be considered an employee of the Company for any
purpose, and his salary and all other benefits shall cease upon the
termination of his employment.
9. ARBITRATION.
(a) At the option of the Company, any and all disputes or
controversies whether of law or fact of any nature whatsoever rising from or
respecting this Agreement shall be decided by arbitration by the American
Arbitration Association (the "Association") and in accordance with the rules
and regulations of the Association.
(b) The arbitrators shall be selected as follows: the Company and
Executive shall each select one independent qualified arbitrator and the two
arbitrators so selected shall select a third arbitrator. The Company
reserves the right to object to any individual arbitrator who shall be
employed by or affiliated with a competing organization.
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(c) Arbitration shall take place at San Francisco, California, or
any other location mutually agreeable to the parties. At the request of the
Company, arbitration proceedings will be conducted in the utmost secrecy; in
such case all documents, testimony and records shall be received, heard and
maintained by the arbitrators in secrecy under seal, available for the
inspection only of the Company or Executive and their respective attorneys
and the respective experts who shall agree in advance and in writing to
receive all such information confidentially and to maintain such information
in secrecy until such information shall become generally known. The
arbitrator, who shall act by majority vote, shall be able to decree any and
all relief of an equitable nature, including but not limited to such relief
as a temporary restraining order, a temporary and/or a permanent injunction,
and shall also be able to award damages, with or without an accounting and
costs. The decree or judgment of an award rendered by the arbitrators may be
entered in any court having jurisdiction thereof.
(d) Reasonable notice of the time and place of arbitration shall
be given to all persons, other than the parties, as shall be required by law,
in which case such persons or those authorized representatives shall have the
right to attend, and/or participate in all the arbitration hearings in such
manner as the law shall require.
(e) All expenses, including reasonable attorneys fees of each
party, relating to arbitration shall be borne by the Company; provided,
however, that if the Company is determined to be the prevailing party in such
arbitration, Executive shall reimburse the Company for Executive's costs and
expenses, including reasonable attorneys fees, incurred in connection with
such arbitration.
10. ASSIGNMENT. This Agreement shall be binding upon and inure to the
benefit of (a) the heirs, executors and legal representatives of Executive
upon Executive's death and (b) any successor of the Company. Any such
successor of the Company shall be deemed substituted for the Company under
the terms of this Agreement for all purposes. As used herein, "successor"
shall include any person, firm, corporation or other business entity which at
any time, whether by purchase, merger or otherwise, directly or indirectly
acquires all or substantially all of the assets or business of the Company.
None of the rights of Executive to receive any form of compensation payable
pursuant to this Agreement shall be assignable or transferable except through
a testamentary disposition or by the laws of descent and distribution upon
the death of Executive. Any attempted assignment, transfer, conveyance or
other disposition (other than as aforesaid) of any interest in the rights of
Executive to receive any form of compensation hereunder shall be null and
void.
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11. NOTICES. All notices, requests, demands and other communications
called for hereunder shall be in writing and shall be deemed given if
delivered personally or three (3) days after being mailed by registered or
certified mail, return receipt requested, prepaid and addressed to the
parties or their successors in interest at the following addresses, or at
such other addresses as the parties may designate by written notice in the
manner aforesaid:
If to the Company: SuperGen, Inc.
Two Annabel Lane, Suite 220
San Ramon, CA 94583
Attn: President
If to Executive: Joseph Rubinfeld
5304 Blackhawk Drive
Danville, CA 94506
12. SEVERABILITY. In the event that any provision hereof becomes or is
declared by a court of competent jurisdiction to be illegal, unenforceable or
void, this Agreement shall continue in full force and effect without said
provision.
13. ENTIRE AGREEMENT. This Agreement represents the entire agreement
and understanding between the Company and Executive concerning Executive's
employment relationship with the Company, and supersedes and replaces any and
all prior agreements and understandings concerning Executive's employment
relationship with the Company.
14. NO ORAL MODIFICATION, CANCELLATION OR DISCHARGE. This Agreement
may only be amended, canceled or discharged in writing signed by Executive
and the Company.
15. GOVERNING LAW. This Agreement shall be governed by the laws of the
State of California.
16. ACKNOWLEDGMENT. Executive acknowledges that he has had the
opportunity to discuss this matter with and obtain advice from his private
attorney, has had sufficient time to, and has carefully read and fully
understands all the provisions of this Agreement, and is knowingly and
voluntarily entering into this Agreement.
17. SURVIVABILITY. Notwithstanding any other provision of this
Agreement, the obligations, covenants and duties of the Company and Executive
under Sections 3 and 4 of this Agreement, as well as any obligations of the
Company to pay accrued benefits to Executive prior to termination of this
Agreement, shall survive any termination of this Agreement.
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IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first above written.
SUPERGEN, INC. JOSEPH RUBINFELD
By: /s/ Henry C. Settle, Jr. /s/ Joseph Rubinfeld
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Signature
Title: CFO
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EXHIBIT A
LIST OF INVENTIONS, ETC.
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<CAPTION>
Identifying Number
Title Date or Brief Description
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</TABLE>
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EXHIBIT B
CALIFORNIA LABOR CODE SECTION 2870
EMPLOYMENT AGREEMENTS; ASSIGNMENT OF RIGHTS
"(a) Any provision in an employment agreement which provides that an
employee shall assign, or offer to assign, any of his or her rights in an
invention to his or her employer shall not apply to an invention that the
employee developed entirely on his or her own time without using the
employer's equipment, supplies, facilities, or trade secret information
except for those inventions that either:
(1) Relate at the time of conception or reduction to practice of
the invention to the employer's business, or actual or demonstrably
anticipated research or development of the employer.
(2) Result from any work performed by the employee for the
employer.
(b) To the extent a provision in an employment agreement purports to
require an employee to assign an invention otherwise excluded from being
required to be assigned under subdivision (a), the provision is against the
public policy of this state and is unenforceable."