EMPLOYMENT, CONFIDENTIAL INFORMATION, INVENTION ASSIGNMENT, AND ARBITRATION AGREEMENTEmployee Secondment Agreement |
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Exhibit 10.13
SUPERGEN, INC.
EMPLOYMENT, CONFIDENTIAL INFORMATION,
INVENTION ASSIGNMENT, AND ARBITRATION AGREEMENT
This Employment, Confidential Information, Invention Assignment, and Arbitration Agreement (the “Agreement”) is entered into as of December 31, 2003 (the “Effective Date”), by and between SuperGen, Inc., a Delaware corporation (the “Company”), and Joseph Rubinfeld (“Employee”).
BACKGROUND
A.
The Company and Employee were parties to
(i) that certain Employment, Confidential Information and Invention Assignment
Agreement, dated as of January 1, 1994, as amended by Amendment No. 1
dated January 17, 1996, and as further amended and restated on
January 1, 1998, (the “First Agreement”) and (ii) that
certain Executive Employment, Confidential Information, Invention Assignment
and Arbitration Agreement, dated March 1, 2002 (the “Second Agreement”),
which superseded in its entirety the First Agreement (collectively, the “Prior
Employment Agreements”).
B.
The Second Agreement will expire by its
terms on December 31, 2003, and the parties desire to enter into this
Agreement, which supersedes in its entirety the Prior Employment Agreements.
C.
Pursuant to the terms of the Second
Agreement, which expires by its terms on December 31, 2003, Employee serves as
the Company’s President and Chief Executive Officer.
NOW THEREFORE, in consideration of the respective covenants and agreements of the parties contained in this Agreement, the Company and Employee agree as follows:
AGREEMENT
1.
TERM. The Company hereby agrees
to employ Employee, and Employee hereby accepts 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
December 31, 2004, unless otherwise terminated sooner by the parties (the
“Term”). The parties may agree to enter into
another at-will employment agreement, on terms agreeable to both parties, at
the end of the Term; provided, however, that Employee’s annualized base
salary pursuant to such agreement shall not be less than $595,000, less
applicable withholdings.
2.
AT-WILL EMPLOYMENT. Notwithstanding the
foregoing in Section 1 above, the parties agree that Employee’s
employment with the Company will be “at-will” employment and may
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be terminated for any reason at any time with or without
notice. Employee understands and agrees that neither his job performance,
commendations, bonuses or the like from the Company give rise to or in any way
serve as the basis for modification, amendment or extension, by implication or
otherwise, of his employment with the Company.
3.
POSITION AND DUTIES. Effective at midnight,
Pacific Standard Time, on December 31, 2003, the Parties agree to
Employee’s reassignment to the position of Chief Scientist of the Company
from that of President and Chief Executive Officer of the Company (the “Reassignment”). As a result of the Reassignment, Employee
shall no longer be employed by the Company as an officer, and Employee hereby
expressly consents to such Reassignment and resigns as President and Chief
Executive Officer of the Company effective as of midnight, Pacific Standard
Time, on December 31, 2003. Employee will render such business and
professional services in the performance of his duties as Chief Scientist as
the Company will reasonably assign to him. During the Term, Employee
agrees to be available to perform employment services at Employee’s home
office for no more than twenty (20) hours per week (at the request of the
Company), provided that Employee agrees to be periodically available at the
Company’s Dublin facilities upon the reasonable request of the Company.
4.
BOARD MEMBERSHIP. Notwithstanding the
Reassignment, Employee shall continue to serve as a member on the
Company’s board of directors (the “Board”)
until the next regularly scheduled meeting of the Company’s
stockholders. The Company will use reasonable efforts to nominate him to
reelection as a member of the Board at that regularly scheduled meeting of
stockholders and will use reasonable efforts to effect such reelection.
Employee shall serve on the Board as Chair Emeritus, with full membership and
under the same terms and conditions to which all directors are subject.
5.
CONFIDENTIAL
INFORMATION.
(a)
COMPANY INFORMATION. Employee agrees at all
times during the Term 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 of Directors of
the Company, any Confidential Information of the Company, except under a
non-disclosure agreement duly authorized and executed by the Company.
Employee 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
therefor, customer lists and customers (including, but not limited to,
customers of the Company on whom Employee called or with whom Employee became
acquainted during his entire term of his employment with the Company),
software, developments, inventions, processes, formulas, technology, designs,
drawings, engineering, hardware configuration information, marketing, finances
or other business information. Employee 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 Employee’s or of others who were under confidentiality obligations as
to the item or items involved or improvements or new versions thereof.
The parties agree that disclosures of Confidential Information may be made by
Employee, and that this paragraph shall not apply, (i) to the extent
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necessary to comply with governmental disclosure requirements or applicable laws, (ii) pursuant to subpoena or order of any judicial, legislative, executive, regulatory or administrative body, or for Employee to lawfully enforce Employee’s rights under this Agreement and (iii) to employees, advisors, legal counsel and financial advisors as may be necessary and appropriate in connection with the proper performance and enforcement of this Agreement.
(b)
FORMER EMPLOYER
INFORMATION.
Employee 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.
(c)
THIRD PARTY
INFORMATION.
Employee 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.
Employee 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 Employee’s work for the
Company consistent with the Company’s agreement with such third party.
6.
INVENTIONS.
(a)
INVENTIONS RETAINED
AND LICENSED.
Employee has no 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 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
Employee’s employment with the Company, Employee incorporates into a
Company product, process or service Prior Inventions owned by Employee or in
which Employee has an interest, Employee 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 Inventions as part
of or in connection with such product, process or service, and to practice any
methods related thereto.
(b)
ASSIGNMENT OF
INVENTIONS.
Employee agrees that he 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 of Employee’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 Employee may solely or jointly conceive or
develop or reduce to practice, or cause to be conceived or developed or reduced
to practice, as a result of and within the scope of his duties as an Employee
of the Company and during the period of time Employee is in the employ of the
Company (collectively referred to as “Company Inventions”),
except as provided in Section 6(f) below. Employee 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
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copyright, are “works made for hire,” as that
term is defined in the United States Copyright Act. Employee understands
and agrees that the decision whether or not to commercialize or market any
Company Inventions developed by Employee 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 Employee as a result of the
Company’s efforts to commercialize or market any such Inventions.
The parties agree that any and all inventions, original works of authorship,
development, concepts, improvements, designs, discoveries, ideas, trademarks or
trade secrets, whether or not patentable or registrable under copyright or
similar laws which are made by Employee (solely or jointly with others) that
are not within the scope of his duties for the Company (i.e., not during the
time that he is actually performing duties for the Company) (collectively
referred to as “non-Company
Inventions”)
shall not be subject to this paragraph and shall be the sole property of
Employee and that he shall have the sole right, title and interest in any such
non-Company Inventions.
(c)
INVENTIONS ASSIGNED
TO THE UNITED STATES.
Employee agrees to assign to the United States government all his right, title,
and interest in and to any and all Company 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.
(d)
MAINTENANCE OF
RECORDS.
Employee agrees to keep and maintain adequate and current written records of all
Inventions made by Employee (solely or jointly with others) during the period
of his employment with the Company. The records will be in the form of
dated 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.
(e)
PATENT AND
COPYRIGHT REGISTRATIONS. Employee agrees to cooperate and assist the Company, or its
designee, agents, and representatives, at the Company’s expense, in every
proper way to secure and perfect the Company’s rights, title and interest
in the Company Inventions and any copyrights, patents, mask work rights 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 preparation and execution of all applications, patent
applications, specifications, oaths, assignments, statements, declarations,
petitions, certificates and petitions for correction and all other instruments
which the Company or any government agency shall deem necessary in order to
apply for, prosecute, correct 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 Company Inventions, and any
copyrights, patents, mask work rights or other intellectual property rights
relating thereto in any and all countries. Employee 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 without further consideration. In addition, Employee
covenants and agrees to take no action that would impair or interfere with the
Company’s quiet enjoyment of its sole and exclusive rights, title and
interest in and to such Company Inventions after termination of this
Agreement. If the Company is unable because of Employee’s mental or
physical incapacity or for any other reason to secure Employee’s
signature to apply for or to pursue, prosecute or correct any application for
any United States or foreign patents or copyright registrations covering
Company Inventions or original works of authorship assigned to the Company as
above, then Employee hereby irrevocably designates and appoints the Company and
its duly authorized officers and agents as his agent and attorney in fact, to
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act for and in Employee’s behalf and stead to execute
and file any such applications and to do all other lawfully permitted acts to
further the prosecution, correction, maintenance and issuance of letters patent
or copyright registrations thereon with the same legal force and effect as if
executed by Employee.
(f)
EXCEPTION TO
ASSIGNMENTS.
Employee understands that the provisions of this Agreement requiring assignment
of Company 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 A) or to any non-Company
Inventions. Employee will advise the Company in writing, within thirty
(30) days, of any inventions that Employee believes meet the criteria in California
Labor Code Section 2870.
7.
COMPENSATION, BONUS
AND FRINGE BENEFITS.
(a)
BASE SALARY. During the Term, the
Company will pay Employee as compensation for his services a base salary at the
annualized rate of Five Hundred and Ninety Five Thousand Dollars ($595,000),
less applicable withholdings (the “Base
Salary”).
The Base Salary shall be paid in periodic installments in accordance with the
Company’s regular payroll practices.
(b)
DISCRETIONARY BONUS. Employee shall be entitled
to a discretionary bonus payment for 2003 in the amount of Two Hundred and
Fifty Thousand Dollars ($250,000), less applicable withholdings (the “Bonus”). The Company shall pay Employee the Bonus within ten (10)
business days after Employee executes (and does not revoke) the Release (as
defined below), and the Release becomes effective (the “Release Date”).
(c)
OTHER BENEFITS. Employee 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 employees generally, upon such terms as
may be therein provided of general application to all employees of the Company
and such other benefits as are mutually deemed appropriate to the position held
by Employee and to the discharge of Employee’s duties. Employee
shall be entitled to not less than twenty (20) business days’ vacation
per year, with remuneration.
(d)
LIFE INSURANCE. During the Term, the
Company, at its expense, will maintain life insurance on behalf of Employee
equal to one hundred and fifty percent (150%) of the Base Salary.
Employee will be entitled to select personal beneficiaries for 100% of the
proceeds of the insurance policy. The Company will provide Employee with
additional cash compensation at the end of each calendar year to fully offset
taxes attributable to Employee as a result of payment of the life insurance
premiums by the Company.
8.
EXPENSES. The Company will reimburse
Employee, in accordance with the Company’s established policies, for
reasonable business related expenses incurred by Employee in furtherance of or
in connection with the performance of Employee’s duties hereunder,
including reasonable expenses incurred in connection with Employee’s home
office (including but not limited to a computer, telephone, fax and internet
charges). Employee shall furnish the Company with
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evidence of such expenses within a reasonable period of
time from the date such expenses were incurred.
9.
TERMINATION BENEFITS.
(a)
INVOLUNTARILY
TERMINATION.
If, during the Term, the Company terminates Employee’s employment with
the Company other than for Cause (as defined herein), death or Disability (as
defined herein), and Employee signs and does not revoke a standard release of
claims with the Company, then Employee will be entitled to receive continuing
payments of severance pay (less applicable withholding taxes) at a rate equal
to his Base Salary rate, as then in effect, until December 31, 2004 (the
“Payment”). The Payment will be
paid in accordance with the Company’s normal payroll practices.
(b)
VOLUNTARY
TERMINATION.
In the event the Employee voluntarily terminates his employment with the Company
for any reason (except as otherwise provided for herein) during the Term, and
Employee signs and does not revoke a standard release of claims with the
Company, then Employee will be entitled to receive continuing payments (less
applicable withholding taxes) at a rate equal to 50% of his Base Salary rate,
as then in effect, until December 31, 2004 (the “Continuing Payment”). The Continuing Payment will be paid in accordance
with the Company’s normal payroll practices.
(c)
TERMINATION FOR
CAUSE, DEATH OR DISABILITY. In the event Employee’s employment with the Company is
terminated for Cause, death or Disability, then Employee shall not be entitled
to receive the Payment or the Continuing Payment, but may be eligible for those
benefits (if any) as may then be established under the Company’s then
existing severance policies at the time of such termination.
(d)
ACCRUED WAGES AND
VACATION; EXPENSES.
Without regard to the reason for, or the timing of, Employee’s
termination of employment: (i) the Company shall pay Employee any unpaid
base salary due for periods prior to his termination of employment;
(ii) the Company shall pay Employee all of Employee’s accrued and
unused vacation through his termination of employment; and (iii) following
submission of proper expense reports by the Employee, the Company shall
reimburse Employee for all expenses reasonably and necessarily incurred by
Employee in connection with the business of the Company prior to his
termination of employment. These payments shall be made promptly upon
Employee’s termination of employment and within the period of time
mandated by law.
(e)
CAUSE. For the purposes of this
Agreement, “Cause” means (i) any act of
personal dishonesty taken by Employee in connection with his responsibilities
which is intended to result in personal enrichment of Employee, (ii)
Employee’s conviction of a felony, (iii) any act by Employee that
constitutes material misconduct and is injurious to the Company, or
(iv) continued violations by Employee of his obligations to the Company;
provided that, in each case except (ii), Employee has received written notice
of the described activity, has been afforded a reasonable opportunity to cure
or correct the activity (not to exceed 15 days) as described in the notice, and
has failed to cure, correct or cease the activity, as appropriate.
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(f)
DISABILITY. For purposes of this
Agreement, “Disability” shall mean a disability,
due to illness or injury, which materially limits Employee from performing each
of his material and substantial duties, even with reasonable accommodation, for
a period of six (6) consecutive months. The Company shall provide
Employee fourteen (14) days’ written notice of termination for
Disability.
10.
STOCK OPTIONS.
(a)
MILESTONE STOCK
OPTIONS.
Employee has heretofore been granted by the Company options to purchase the
Company’s common stock, which vest upon the attainment of certain
milestones and triggers (the “Milestone
Option”).
As of the date hereof, approximately 300,000 shares subject to the Milestone
Option are unvested. The Company shall accelerate, on or about the
Release Date, the vesting of 170,000 shares subject to the Milestone Option, in
tranches of 100,000 shares and 70,000 shares respectively, as identified by
Employee. The remaining 130,000 shares subject to the Milestone Option shall
continue to vest in accordance with the terms of the stock option plan under
which they were issued and the stock option agreement between the Company and
Employee
(b)
OPTION ACCELERATION
IN THE EVENT OF INVOLUNTARY TERMINATION FOLLOWING A CHANGE OF CONTROL. If, during the Term,
Employee’s employment with the Company or a successor corporation is
terminated by the Company or successor corporation as a result of an
Involuntary Termination (as defined below) following a Change of Control (as
defined below), Employee shall be entitled to full acceleration of the vesting
of any then unvested stock options (including all unvested Milestone Options)
then held by Employee, and such accelerated options shall remain subject to and
be exercisable in accordance with the terms of the stock option plan under
which they were issued and the stock option agreement between the Company and
Employee.
(c)
CHANGE OF CONTROL. For purposes of this
Agreement, “Change of Control” means the occurrence of any
of the following events: (i) any “person” (as such term is
used in Sections 13(d) and 14(d) of the Exchange Act) becomes the
“beneficial owner” (as defined in Rule 13d-3 of the Exchange Act),
directly or indirectly, of securities of the Company representing fifty percent
(50%) or more of the total voting power represented by the Company’s then
outstanding voting securities; (ii) the consummation of the sale or disposition
by the Company of all or substantially all of the Company’s assets; or
(iii) the consummation of a merger or consolidation of the Company with any
other corporation, other than a merger or consolidation which would result in
the voting securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity or its parent) at least fifty
percent (50%) of the total voting power represented by the voting securities of
the Company or such surviving entity or its parent outstanding immediately
after such merger or consolidation.
(d)
INVOLUNTARY
TERMINATION.
For purposes of this Agreement, “Involuntary
Termination”
means (i) without Employee’s express written consent, a significant
reduction of Employee’s duties, position or responsibilities relative to
Employee’s duties, position or responsibilities in effect immediately
prior to such reduction; (ii) without Employee’s express
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written consent, a substantial reduction, without good
business reasons, of the facilities and perquisites (including office space and
location) available to Employee immediately prior to such reduction;
(iii) without Employee’s express written consent, a material reduction
by the Company of Employee’s Base Salary as in effect immediately prior
to such reduction; (iv) without Employee’s express written consent,
a material reduction by the Company in the kind or level of employee benefits
to which Employee is entitled immediately prior to such reduction with the
result that Employee’s overall benefits package is significantly reduced;
(v) without Employee’s express written consent, the relocation of
Employee to a facility or a location more than fifty (50) miles from his
current location, or (vi) any purported termination of Employee other than
for Cause (as defined in this Agreement).
11.
RELEASE OF CLAIMS. In consideration for the
receipt of the Bonus provided for in Section 7(b) hereof, Employee agrees to
execute and not revoke, in the form substantially attached hereto as Exhibit
B, a mutual release of claims covering potential claims by both parties
against the other up to and including the Effective Date (the “Release”). In no event shall the Company be obligated
to provide, and Employee shall have no right to receive, the Bonus in the event
(i) Employee fails to execute the Release or (ii) Employee revokes the
Release. Furthermore, in consideration of the Termination Benefits provided
for in Sections 9(a) and/or 9(b), Employee agrees to execute and not revoke, in
a form substantially similar to Exhibit C, a mutual release of claims
for the time period covering the Term (the “Second Release”). The Company will also execute the Release
and the Second Release once, and if, Employee executes each document.
12.
LIMITATION ON
PAYMENTS. In
the event that the severance and other benefits provided for in this Agreement
or otherwise payable to Employee, including but not limited to, the accelerated
vesting of any stock options previously or hereafter granted to Employee,
(i) constitute “parachute payments” within the meaning of
Section 280G of the Code, and (ii) would be subject to the excise tax
imposed by Section 4999 of the Code (the “Excise Tax”), then Employee’s benefits under this
Agreement shall be reduced to the extent necessary in order to avoid such
benefits being subject to the Excise Tax.
Unless the Company and Employee otherwise agree in writing, any determination required under this Section 12 shall be made in writing by the Company’s independent public accountants (the “Accountants”), whose determination shall be conclusive and binding upon Employee and the Company for all purposes. For purposes of making the calculations required by this Section 12, the Accountants may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of Section 280G and 4999 of the Code. The Company and Employee shall furnish to the Accountants such information and documents as the Accountants may reasonably request in order to make a determination under this Section 12. The Company shall bear all costs the Accountants may reasonably incur in connection with any calculations contemplated by this Section 12.
13.
NONSOLICITATION. During the Term and for a
period of twelve (12) months following Employee’s termination of
employment with the Company for any reason, Employee agrees that he shall not
either directly or indirectly solicit, induce, recruit or encourage any of the
Company’s employees to leave their employment, or attempt to solicit,
induce, recruit, or encourage
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