Exhibit 10.1
SUPERGEN, INC.
EXECUTIVE EMPLOYMENT AND
CONFIDENTIAL INFORMATION
AND INVENTION ASSIGNMENT
AGREEMENT
This Executive Employment and
Confidential Information and Invention Assignment Agreement (the
“Agreement”) is made and entered into effective as of
April 1, 2009 (the “Effective Date”) by and
between SuperGen, Inc., a Delaware corporation (the
“Company”), and James S. Manuso
(“Executive”).
1.
Term . The Company hereby agrees to continue to
employ Executive and Executive hereby accepts continued employment,
on the terms and conditions set forth herein. The term of
this Agreement shall commence upon the Effective Date and shall
continue until and including March 31, 2012.
2.
Positions and Duties
. Executive agrees to continue
to serve the Company as its President and Chief Executive Officer
or in such other executive capacity as the Board may from time to
time request. During the term of this Agreement, Executive
will have all duties and responsibilities that are reasonably
consistent with these titles and positions and 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 of Directors (the
“Board”), except that without the 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.
Confidential
Information .
3.1
Company Information
. Executive agrees at all
times during the term of his employment and thereafter, to hold in
the 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, except under a non-disclosure agreement
duly authorized and executed by the Company. Executive
understands that “Confidential Information” means any
non-public information that relates to the actual or anticipated
business or research and development of the Company, technical
data, trade secrets or know-how, including, but not limited to,
research, product plans or other information regarding
Company’s products or services and markets therefore,
customer lists and customers (including, but not limited to,
customers of the Company on whom Executive called with whom
Executive became acquainted during the term of his employment),
software developments, inventions, processes, formulas, technology,
designs, drawings, engineering, hardware configuration information,
marketing, finances or other business information. Executive
further understands that Confidential Information does not include
any of the foregoing items that have become publicly known and made
generally available through no wrongful act of Executive’s or
of others who were under confidentiality obligations as to the item
or items involved or improvements or new versions
thereof.
3.2
Former Employer
Information .
Executive agrees that he will not, during his employment with the
Company, improperly use or disclose any proprietary information or
trade secrets of any former employer or other person or entity and
that he 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.
3.3
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
Executive’s work for the Company’s consistent with the
Company’s agreement with such third party.
4.
Inventions
.
4.1
Inventions Retained and
Licensed . Except
as listed on Exhibit A , Executive does not have any
inventions, original works of authorship, developments,
improvements, and trade secrets which were made by him prior to his
employment with the Company (collectively referred to as
“Prior Inventions”), which belong to him, which may
relate to the Company’s proposed business, products or
research and development, and which were not previously assigned to
the Company. If in the course of Executive’s employment
with the Company, Executive incorporates into a Company product,
process or service a Prior Invention owned by Executive or in which
Executive has an interest, Executive hereby grants to the Company a
nonexclusive, royalty-free, fully paid-up, 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 service, and to practice any method related
thereto.
4.2
Assignment of
Inventions .
Executive agrees that Executive will 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 Executive’s right, title, and interest in
and to any and all inventions, original works of authorship,
developments, concepts, improvements, designs, discoveries, ideas,
trademarks or trade secrets, whether or not patentable or
registrable under copyright or similar laws, which Executive may
solely or jointly conceive or develop or reduce to practice, or
cause to be conceived or developed or reduced to practice, during
the period of time Executive is in the employ of the Company
(collectively referred to as “Inventions”), except as
provided in Section 4.6 below. Executive further
acknowledges that all original works of authorship which are made
by him (solely or jointly with others) within the scope of and
during the period of his employment with the Company, and which are
protectable by copyright, are “works made for hire,” as
that term is defined in the United States Copyright Act.
Executive understands and agrees that the decision
2
whether or not to commercialize or
market any Invention developed by Executive solely or jointly with
others is within the Company’s sole discretion and for the
Company’s sole benefit and that no royalty will be due to
Executive as a result of the Company’s efforts to
commercialize or market any such Invention.
4.3
Inventions Assigned To The United
States . Executive
agrees to assign to the United States government all his 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.
4.4
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 period
of his 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.
4.5
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
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, mask work rights or other intellectual
property rights relating thereto. Executive further agrees
that his obligation to execute or cause to be executed when it is
in his power to do so, any such instrument or papers shall continue
after the termination of this Agreement. If the Company is
unable because of Executive’s 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 his 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
letters patent or copyright registrations thereon with the same
legal force and effect as if executed by Executive.
4.6
Exception to
Assignments .
Executive understands that the provision 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 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.
3
5.
Office . The Company shall provide Executive with
an office at the location of the Company’s primary business
operations that is consistent with his positions and
titles.
6.
Compensation and Fringe
Benefits .
6.1
Base Salary
. For all services rendered by
Executive pursuant to this Agreement, the Company shall pay
Executive a base salary (the “Base Salary”) at the
annual rate of not less than Five Hundred Seventy Four Thousand
Seven Hundred Fifty Two Dollars ($574,752.00) as of the Effective
Date. Commencing January 1, 2010, the Executive’s
annual salary will be adjusted to Six Hundred Twenty Five Thousand
Dollars ($625,000.00). The Base Salary shall be paid in
periodic installments in accordance with the Company’s
regular payroll practices. Executive’s annual salary
shall be adjusted annually thereafter on January 1 of each
year during the term of the 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).”
6.2
Performance Bonus
.
(a)
For the calendar year 2009, the
Executive shall be eligible to receive an annual performance-based
bonus of Three Hundred Fifty Thousand Dollars ($350,000.00) based
upon achievement of certain criteria to be specified by the
compensation committee of the Board (“Compensation
Committee”), including (without limitation) revenue and
profitability targets and/or other organizational and strategic
milestones (the “2009 Performance Bonus”). The
2009 Performance Bonus shall be based upon achieving performance
objectives during 2009 and shall be payable in accordance with the
Company’s normal payroll practices and policies no later than
March 15 of the year following the year in which
Executive’s right to such bonus vests.
(b)
For the remaining term of the
Agreement, the Executive shall be eligible to receive an annual
performance-based bonus of Six Hundred Fifty Thousand Dollars
($650,000.00) based upon achievement of certain criteria to be
specified by the Compensation Committee, including (without
limitation) revenue and profitability targets and/or other
organizational and strategic milestones (the “Performance
Bonus”). The Performance Bonus shall be based upon
achieving performance objectives during each calendar year and
shall be payable in accordance with the Company’s normal
payroll practices and policies no later than March 15 of the
year following the year in which Executive’s right to such
bonus vests.
6.3
Stock Options
.
(a)
Annual Options. Executive shall be permitted
to
4
participate in any stock option and
similar plans as adopted by the Company from time to time for the
grant of stock options and other equity incentives to the
Company’s employees. On the first business day
occurring on or after April 1, 2010 of each year during the
term of this Agreement (subject to Executive’s continuous
employment with the Company through each such anniversary), the
Company shall grant Executive a stock option with a vesting
commencement date of April 1 of the year in which it is
granted, which will be, to the extent possible under the $100,000
rule of Section 422(d) of the Internal Revenue Code
of 1986, as amended (the “Code”), an “incentive
stock option” (as defined in Section 422 of the Code),
under the Company’s 2003 Stock Plan (the “Plan”)
to purchase 360,000 shares of the Company’s common stock (as
adjusted for stock splits and stock combinations that may occur
after the date of this Agreement), which each such option shall
have a per share exercise price equal to the fair market value of
the Company’s common stock on the applicable date of grant
(each an “Annual Option” and collectively, the
“Annual Options”). Subject to the accelerated
vesting provisions set forth herein, each Annual Option will vest
as to 1/12th of the shares subject to such option each month
following its date of grant, so that each Annual Option will be
fully vested and exercisable one year from its grant date, subject
to Executive’s continuous service to the Company through each
relevant vesting date. Notwithstanding the above, in the
event of a Change in Control (as defined in Section 7.4 below)
of the Company prior to the granting of all Annual Options, and
that occurs while Executive remains employed hereunder, then all
Annual Options yet to be granted through the term of the Agreement
will immediately be granted and 100% of the then-unvested shares
subject to all such Annual Options will vest and become
exercisable.
(b)
Performance Options .
(i) On the Effective Date, the
Company shall grant Executive a stock option, which is, to the
extent possible under the $100,000 rule of
Section 422(d) of the Code, an “incentive stock
option” (as defined in Section 422 of the Code), under
the Plan to purchase 1,200,000 shares of the Company’s common
stock, which such option shall have a per share exercise price
equal to the fair market value of the Company’s common stock
on the Effective Date (the “2009 Performance Option”
and together with the Annual Options, the
“Options”).
(ii) The 2009 Performance
Option shall vest upon the Company’s achievement of the
following performance milestones, subject to Executive’s
continuous employment with the Company through the date any such
performance milestone is achieved:
(A)
100,000 shares will vest upon the
clearance by the U.S. Food and Drug Administration
(“FDA”) of an Investigational New Drug Application
(“IND”) submitted by the Company that will allow the
Company to initiate a clinical study of the compound that is the
subject of the IND;
(B)
100,000 shares will vest upon
clearance by the FDA of another IND submitted by the Company that
will allow the Company to initiate a
5
clinical study of the compound that
is the subject of the IND (subsequent to the IND described in
subsection (A) above);
(C)
100,000 shares will vest upon
clearance by the FDA of another IND submitted by the Company that
will allow the Company to initiate a clinical study of the compound
that is the subject of the IND (subsequent to the INDs described in
subsections (A) and (B) above);
(D)
100,000 shares will vest upon the
execution of a definitive agreement with a corporate partner or
licensee for one or more of the drugs in the Company’s
portfolio, or for a discovery collaboration, providing the value to
the Company of any such deal is projected to exceed $10 million in
combined up-front payments, R&D payments, milestones and
royalties to the Company throughout its course;
(E)
100,000 shares will vest upon the
execution of a definitive agreement with a corporate partner or
licensee for one or more of the drugs in the Company’s
portfolio, or for a discovery collaboration, providing the value to
the Company of any such deal is projected to exceed $15 million in
combined up-front payments, R&D payments, milestones and
royalties to the Company throughout its course;
(F)
250,000 shares will vest upon the
securing of any one of the following: (1) execution of a
definitive agreement with a third corporate partner or licensee for
one or more of the drugs in the Company’s portfolio, or for a
discovery collaboration, providing the value to the Company of any
such deal is projected to exceed $25 million in combined up-front
payments, R&D payments, milestones and royalties to the Company
throughout its course; (2) a transaction wherein the Company
acquires another company, and the combined entity is valued at a
premium of at least 10 percent above the market capitalization of
the Company immediately before the transaction is closed for a
period of thirty (30) consecutive days based on the closing price
of the Company’s common stock traded on the Nasdaq stock
market; or (3) $25 million in additional financing either
through the sale of debt, equity or other securities of the
Company. For the sake of clarity, 250,000 shares will vest
upon the first of these that is secured — the securing of
more than one of these shall not result in additional
vesting;
(G)
100,000 shares will vest upon the
Company achieving a cash-flow positive year of operations during
the term of this Agreement;
6
(H)
100,000 shares will vest upon the
Company achieving the next cash-flow positive year of operations
during the term of the Agreement that follows the cash-flow
positive year of operations for which the performance milestone is
achieved pursuant to subsection (G) above);
(I)
100,000 shares will vest upon the
Company’s commencement of an FDA-cleared Phase II clinical
trial; and
(J)
150,000 shares will vest upon
achievement of additional milestone(s) to be agreed upon with
the Board, including, but not limited to, acquisition of a company
or drug that is assessed to be value-enhancing by the
Board.
(iii) Executive is still
eligible to achieve the outstanding performance milestones
described in Section 6.3(b) of that certain Amended and
Restated Executive Employment and Confidential Information and
Invention Assignment Agreement by and between the Company and
Executive, dated as of October 28, 2008 (the “2008
Agreement”) with respect to the performance option granted to
Executive in connection with the 2008 Agreement (the “2008
Performance Option”), and subject to Executive’s
continuous employment with the Company through the date any such
performance milestone is achieved. For purposes of clarity,
under no circumstances shall Executive vest in both the 2009
Performance Option and the 2008 Performance Option simultaneously,
to the ex
