Document:

Exhibit
10.14

 

 

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 as of
January 1, 2004 (the “Effective Date”) by and between SuperGen, Inc.,
a Delaware corporation (the “Company”), and James S. Manuso (“Executive”).

 

RECITALS

 

WHEREAS, the Company and Executive desire to establish the terms on
which the Company will employ Executive as its President and Chief Executive
Officer.

 

NOW, THEREFORE, in consideration of the premises and mutual promises,
covenants, and conditions contained herein, the Company and Executive agree on
the terms and conditions set forth herein as follows:

 

AGREEMENT

 

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 upon the Effective Date and shall continue until and including
December 31, 2006.

 

2.                                      Positions
And Duties.  Executive agrees 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 therefor,
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

 

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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 protectible 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 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

 

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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 an 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.

 

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
Four Hundred Thousand Dollars ($400,000). 
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 on January 1 of
each year 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                               Bonuses.

 

(a)                                  Executive
shall be entitled to a guaranteed bonus of One Hundred Thousand Dollars
($100,000) on December 31 of each year during the term of this Agreement,
provided that he remains continuously employed by the Company through each
applicable date (the “Guaranteed Bonus”), excepting for the first year of
employment, during which Executive may take down all or part of the guaranteed
bonus at any time after January 1, 2004. 
The Guaranteed Bonus for the second and third years of Executive’s
employment will be paid no later than January 31 of the following year for
which such Guaranteed Bonus is earned in accordance with the Company’s normal
payroll practices and policies.

 

(b)                                 Executive
shall be eligible to receive an annual performance-based bonus of Two Hundred
and Fifty Thousand Dollars ($250,000) based upon

 

4

 

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
“Performance Bonus”; and together with the Guaranteed Bonus, the
“Bonuses”).  The Performance Bonus shall
be based upon achieving performance objectives during each calendar year and
shall be payable no later than March 31 of the following year in accordance
with the Company’s normal payroll practices and policies.

 

6.3                               Stock Options.

 

(a)                                  Executive
shall be permitted to 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 Effective Date and on each anniversary thereafter 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, 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 250,000 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 8.1 below) of the Company prior to the granting of all
Annual Options, then the securities underlying all of the then remaining yet
unvested Annual Options shall be accelerated with respect to their vesting and
shall be granted in their entirety to Executive.

 

(b)                                 On
the Effective Date, the Company shall grant Executive a stock option, which
will be, 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 1,000,000 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
“Performance Option” and together with the Annual Options, the “Options”).  The 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:

 

•                  50,000
shares subject to the Performance Option will vest upon European approval of
Orathecin;

 

5

 

•                  50,000
shares subject to the Performance Option will vest upon European approval of
Decitabine;

 

•                  200,000
shares subject to the Performance Option will vest upon the securing of a
significant corporate partner for one or more of the Company’s drugs or
$25,000,000 in additional financing;

 

•                  200,000
shares subject to the Performance Option will vest upon the Company achieving annual
gross sales of $30,000,000 or more;

 

•                  50,000
shares subject to the Performance Option will vest upon the acquisition from a
third party of at least one Phase II or more advanced stage compound;

 

•                  100,000
shares subject to the Performance Option will vest upon completion of Phase III
of a compound acquired during Executive’s tenure as the Company’s Chief
Executive Officer during the term of this Agreement;

 

•                  100,000
shares subject to the Performance Option will vest upon FDA approval of a
compound acquired by the Company during the term of this Agreement; and

 

•                  250,000
shares subject to the Performance Option will vest upon achievement of
additional milestone(s) to be agreed upon with the Board.

 

(c)                                  Each
Option shall have a term of ten (10) years from its date of grant, subject to
earlier termination in connection with Executive’s termination of service to
the Company as provided in the Option Agreements.  The Options will be subject to the terms, definitions and
provisions of the Plan and the stock option agreements to be executed by and
between Executive and the Company (the “Option Agreements”), all of which
documents will have terms substantially identical to that of Executive’s
predecessor as Chief Executive Officer and are incorporated herein by
reference.

 

6.4                               Life
Insurance.  During the term of
the Agreement, the Company will pay the full premium on a $4 million key person
life insurance policy covering Executive. 
Executive will be entitled to select personal beneficiaries for 25% of
the proceeds of the insurance policy. 
The Company will provide Executive with additional cash compensation at
the end of each calendar year to fully offset taxes attributable to Executive
as a result of payment of the life insurance premiums by the Company.

 

6.5                               Other
Benefits.  Executive shall be
entitled to participate in such group life, pension, disability, accident,
hospital and medical insurance plans, and such

 

6

 

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 by the Compensation Committee and
Executive 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.

 

6.6                               Additional
Compensation.  Executive shall also be eligible to
receive such additional salary or other incentive compensations as the
Compensation Committee may, in its sole discretion, determine from time to
time.

 

7.                                      Expenses.

 

7.1                               Automobile
Expense.   Up to a maximum of
Twenty Thousand Dollars ($20,000) annually, the Company will lease and pay for
the maintenance of an automobile selected by Executive for his exclusive
use.  The Company will also pay for
automobile insurance for the Executive, up to a maximum of Three Thousand
Dollars ($3,000) annually.

 

7.2                               Business
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.

 

7.3                               Relocation
Expenses.  The Company will pay
or reimburse Executive for all reasonable relocation expenses incurred by
Executive in connection with his and his family’s relocation from New York to
California, including, but not limited to short-term hotel costs or apartment
rental for Executive for a period not to exceed three (3) months, house-hunting
travel by Executive’s spouse and all household goods moving costs.  The total of all such amounts will not
exceed $60,000.  The Company will
provide Executive with additional cash compensation at the end of the calendar
year to fully offset taxes attributable to Executive as a result of payment of
such reasonable relocation expenses by the Company.

 

8.                                      Termination Benefits.

 

8.1                               Termination
Benefits.  If Executive’s
employment with the Company is terminated by the Company as a result of an
“Involuntary Termination” (as defined below) within one (1) year
following a “Change in Control” (as defined below), Executive shall be entitled
to receive the following severance benefits: 
(1) a lump sum payment equivalent to one (1) year of Executive’s
then current Base Salary; and (2) a lump sum payment equivalent to any unpaid
amount of the Bonuses referenced in

 

7

 

Section
6.2, up to a maximum of Five Hundred Thousand Dollars ($500,000); and (3) full
acceleration of the vesting of any then unvested stock options held by
Executive.

 

For the purposes of this Agreement, “Involuntary Termination” means (i)
without Executive’s express written consent, a significant reduction of
Executive’s duties, position or responsibilities relative to Executive’s
duties, position or responsibilities in effect immediately prior to such
reduction; (ii) without Executive’s express written consent, a substantial
reduction, without good business reasons, of the facilities and prerequisites
(including office space and location) available to Executive immediately prior
to such reduction; (iii) without Executive’s express written consent, a
material reduction by the Company of Executive’s base salary as in effect
immediately prior to such reduction; (iv) without Executive’s express written
consent, a material reduction by the Company in the kind or level of employee
benefits to which Executive is entitled immediately prior to such reduction
with the result that Executive’s overall benefits package is significantly
reduced; (v) without Executive’s express written consent, the relocation
of Executive to a facility or a location more than fifty (50) miles from the
current location of the Company, or (vi) any purported termination of Executive
other than for “Cause” (as defined below).

 

For the purposes of this Agreement, “Change in 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 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 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.

 

For the purposes of this Agreement, “Cause” means (i) any act of
personal dishonesty taken by the Executive in connection with his
responsibilities as a Service Provider which is intended to result in personal
enrichment of the Executive, (ii) the Executive’s conviction of a felony, (iii)
any act by the Executive that constitutes material misconduct and is injurious
to the Company, or (iv) continued violations by the Executive of the
Executive’s obligations to the Company.

 

8.2                               Limitation
On Payments.  In the event that
the severance and other benefits provided for in this Agreement or otherwise
payable to Executive, including but not limited to, the accelerated vesting of
any stock options previously or hereafter granted to Executive, (i) constitute
“parachute payments” within the meaning of Section 280G of the Code, and (ii)
would be subject to the excise tax imposed by

 

8

 

Section 4999 of the Code (the “Excise Tax”), then
Executive’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 Executive otherwise agree in writing, any
determination required under this Section shall be made in writing by the
Company’s independent public accountants (the “Accountants”), whose
determination shall be conclusive and binding upon Executive and the Company
for all purposes.  For purposes of
making the calculations required by this Section, 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 Executive shall furnish to the Accountants such information and
documents as the Accountants may reasonably request in order to make a
determination under this Section.  The
Company shall bear all costs the Accountants may reasonably incur in connection
with any calculations contemplated by this Section.

 

9.                                      Arbitration And Equitable Relief.

 

9.1                               Arbitration.  In consideration of Executive’s employment
with the Company, the Company’s promise to arbitrate all employment-related
disputes and Executive’s employment with the Company, the Company’s promise to
arbitrate all employment-related disputes and Executive’s receipt of the
compensation and other benefits paid to Executive by the Company, at present
and in the future, Executive agrees that any and all controversies claims or
disputes with anyone (including the Company and any employee, officer,
director, shareholder or benefit pan of the Company in their capacity as such
or otherwise) arising out of, relating to, or resulting from Executive’s
employment with the Company, or the termination of Executive’s employment with
the Company, including any breach of this Agreement, shall be subject to
binding arbitration rules set forth in California Code of Civil Procedure
Section 1280 through 1294.2, including Section 1283.05 (the “Rules”) and
pursuant to California law.  Disputes
which Executive agrees to arbitrate, and thereby agrees to waive any right to a
trial by jury, include any statutory claims under the state or federal law,
including, but not limited to, claims under title VII of the Civil Rights Act
of 1964, the Americans with Disabilities Act of 1990, the Age Discrimination in
Employment Act of 1967, the Older Workers Benefit Protection Act, the
California Fair Employment and Housing Act, the California Labor Code, claims
of harassment, discrimination or wrongful termination and any statutory
claims.  Executive further understands
that this Agreement to arbitrate also applies to any disputes that the Company
may have with Executive.

 

9.2                               Procedure.  Executive agrees that any arbitration will
be administered by the American Arbitration Association (“AAA”) and that the
neutral arbitrator will be selected in a manner consistent with its National
rules for the Resolution of Employment Disputes.  Executive agrees that the arbitrator shall have the power to
decide any motions brought to any party to the arbitration, including motions
for summary judgment and/or adjudication and motions to dismiss and demurrers,
prior

 

9

 

to any arbitration hearing.  Executive also agrees that the arbitrator shall have the power to
award any remedies, including attorneys’ fees and costs, available under
applicable law.  Executive understands
the Company will pay for any administrative or hearing fees charged by the arbitrator
or AAA, except that Executive shall pay the first $125.00 of any filing fees
associated with any arbitration he initiates. 
Executive agrees that the arbitrator shall administer and conduct any
arbitration in a manner consistent with the rules and that to the extent that
the AAA’s National Rules for the Resolution of Employment Disputes conflict
with the Rules, the Rules shall take precedence.  Executive agrees that the decision of the arbitrator shall be in
writing.

 

9.3                               Remedy.  Except as provided by the Rules and this
Agreement, arbitration shall be the sole, exclusive and final remedy for any
dispute between Executive and the Company. 
Accordingly, except as provided for and by the Rules and this Agreement,
neither Executive nor the Company will be permitted to pursue court action
regarding claims that are subject to arbitration.  Notwithstanding, the arbitrator will not have the authority to
disregard or refuse to enforce any lawful Company policy, and the arbitrator
shall not order or require the Company to adopt a policy not otherwise required
by law which the Company has not adopted.

 

9.4                               Availability
Of Injunctive Relief.  In
addition to the right under the Rules to petition to the court for provisional
relief, Executive agrees that any party may also petition the court for
injunctive relief whether either party alleges or claims a violation of this
Agreement or any other agreement regarding trade secrets, confidential
information, nonsolicitation of Labor Code '2870.  Executive understands that any breach or threatened breach of
such an agreement will cause irreparable injury and that money damages will not
provide an adequate remedy therefor and both parties hereby consent to the
issuance of an injunction.  In the event
either party seeks injunctive relief, the prevailing party shall be entitled to
recover reasonable costs and attorney fees.

 

9.5                               Administrative
Relief.  Executive understands
that this Agreement does not prohibit Executive from pursuing an administrative
claim with a local, state or federal administrative body such as the Department
of Fair Employment and Housing, the Equal Employment Opportunity Commission, or
the Workers’ Compensation Board.  This
Agreement, however, does preclude Executive from pursing court action regarding
any such claim.

 

9.6                               Voluntary
Nature Of This Agreement. 
Executive acknowledges and agrees that Executive is executing this
Agreement voluntarily and without any duress or undue influence by the Company
or anyone else.  Executive further
acknowledges and agrees that Executive has carefully read this Agreement and
has asked any questions needed for Executive to understand the terms,
consequences and binding effect of this Agreement and fully understand it,
including that  Executive is waiving his right to a jury
trial.  Finally,
Executive agrees that he has been provide an opportunity to seek the advice of
an attorney of his choice before signing this Agreement.

 

10

 

10.                               Contract Renewal.  This Agreement is automatically renewed for
a successive three (3) year term unless either party gives the other party
three (3) months notice prior to expiration of the Agreement of their intent
not to renew the Agreement.

 

11.                               Assignment.  This Agreement shall be binding upon and
inure to the benefit of (a) the heirs, executors an 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
ant 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.

 

12.                               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.

  
	
   

  	
  4140 Dublin Blvd., Suite 200

  
	
   

  	
  Dublin, CA 
  94568

  
	
   

  	
  Attn:

  	
  Chief Financial Officer and

  
	
   

  	
   

  	
  Chairman of the Governance

  
	
   

  	
   

  	
  and Nominating Committee of

  
	
   

  	
   

  	
  the SuperGen Board of Directors

  
	
   

  	
   

  	
   

  
	
  If to the Executive:

  	
  James S. Manuso

  
	
   

  	
  5130 Route 212

  
	
   

  	
  Willow, NY 12495

  

 

13.                               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.

 

14.                               Entire
Agreement.  This Agreement,
together with the Plan and Option Agreements, 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, whether oral or written, concerning
Executive’s employment relationship with the Company.

 

11

 

15.                               Waiver
of Breach.  The waiver of a
breach of any term or provision of this Agreement, which must be in writing,
will not operate as or be construed to be a waiver of any other previous or
subsequent breach of this Agreement.

 

16.                               Headings.  All captions and section headings used in
this Agreement are for convenient reference only and do not form a part of this
Agreement.

 

17.                               No
Oral Modification, Cancellation Or Discharge.  This Agreement may only be amended, canceled or discharged in
writing signed by Executive and the Company.

 

18.                               Tax
Withholding.  All payments made
pursuant to this Agreement will be subject to withholding of applicable taxes.

 

19.                               Governing
Law.  This Agreement shall be
governed by the internal substantive laws, but not the choice of law rules, of
the State of California.

 

20.                               Acknowledgement.  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.

 

21.                               Counterparts.  This Agreement may be executed in
counterparts, and each counterpart will have the same force and effect as an
original and will constitute an effective, binding agreement on the part of
each of the undersigned.

 

IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.

 

 

	
  SUPERGEN,
  INC.

  	
   

  	
  JAMES
  S. MANUSO

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Walter Lack

  	
   

  	
   

  	
  /s/ James S. Manuso

  	
   

  
	
   

  	
  Walter Lack

  	
   

  	
   

  
	
   

  	
  Chairman,
  Governance &

  	
   

  	
   

  
	
   

  	
  Nominating
  Committee of the

  	
   

  	
   

  
	
   

  	
  SuperGen Board
  of Directors

  	
   

  	
   

  
						

 

12

 

EXHIBIT A

 

INVENTIONS
RETAINED AND LICENSED

 

 

EXHIBIT B

 

CALIFORNIA LABOR CODE
SECTION 2870

INVENTION ON OWN TIME – EXEMPTION FROM AGREEMENT

 

(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 anticipate research or
development of the employer; or

 

(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.QuickLinks
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Exhibit 4.01    
    

 
 

1997 EMPLOYEE STOCK OPTION PLAN
  OF
  CANTEL MEDICAL CORP.    
    

        1.     The Plan. This 1997 Employee Stock Option Plan (the "Plan") is intended to encourage ownership of stock of Cantel Medical
Corp. (the "Corporation") by specified employees of the Corporation and its subsidiaries and to provide additional incentive for them to promote the success of the business of the Corporation. 

        2.     Stock Subject to the Plan. Subject to the provisions of Paragraph 14 hereof, the total number of shares of Common
Stock, par value $.10 per share, of the Corporation (the "Stock") which may be issued pursuant to Incentive Stock Options, as defined by Section 422 of the Internal Revenue Code ("ISOs"), and
non-Incentive Stock Options ("Non-ISOs") granted under the Plan (the "Options") shall be 2,000,000. Such shares of Stock may be in whole or in part, either authorized and
unissued shares or treasury shares as the Board of Directors of the Corporation (the "Board") shall from time to time determine. If an Option shall expire or terminate for any reason without having
been exercised in full, the unpurchased shares covered thereby shall (unless the Plan shall have been terminated) again be available for Options under the Plan. 

        3.     Administration of the Plan. The Plan shall be administered by a committee (the "Committee") composed of two or more
non-employee members of the Board which shall have plenary authority, in its discretion, to determine the employees of the Corporation and its subsidiaries to whom Options shall be granted
("Optionees"), the nature of the Option (i.e., whether an ISO or non-ISO), the number of shares to be subject to each Option (subject to the
provisions of Paragraph 2), the option exercise price (the "Exercise Price") (subject to the provisions of Paragraph 7), the vesting schedule of each option and the other terms of each
Option. The Board shall have plenary authority, subject to the express provisions of the Plan, to interpret the Plan, to prescribe, amend and rescind any rules and regulations relating to the Plan and
to take such other action in connection with the Plan as it deems necessary or advisable. The interpretation and construction by the Board of any provisions of the Plan or of any Option granted
thereunder shall be final and no member of the Board shall be liable for any action or determination made in good faith with respect to the Plan or any Option granted thereunder by the Committee. 

        4.     Employees Eligible for Options. All employees of the Corporation or its subsidiaries shall be eligible for Options. In
making the determination as to employees to whom Options shall be granted and as to the number of shares to be covered by such Options, the Committee shall take into account the duties of the
respective employees, their present and potential contributions to the success of the Corporation and such other factors as it shall deem relevant in connection with accomplishing the purpose of the
Plan. 

        5.     Term of Plan. The Plan shall terminate on, and no Options shall be granted after October 15, 2007 provided that the
Committee may at any time terminate the Plan prior thereto. 

        6.     Maximum Option Grant. With respect to an Option granted to an individual that is intended to qualify as an ISO, the
aggregate fair market value (determined as of the time the Option is granted) of the Stock with respect to which such Option and all other ISOs granted to the individual (whether under this Plan or
under any other stock option plan of the Corporation or any of its subsidiaries) become exercisable for the first time in any calendar year may not exceed $100,000. 

        7.     Exercise Price. Each Option shall state the Exercise Price, which shall be, in the case of ISOs, not less than 100% of the
fair market value of the Stock on the date of the granting of the Option, nor less than 110% in the case of an ISO granted to an individual who, at the time the Option is granted, is a 10% Holder (as
hereinafter defined). The fair market value of shares of Stock shall be determined by the Board and shall be (i) the closing price of the Stock on the date of the granting of the Option as
reported by the principal exchange on which the Company's Stock is traded or any quotation 

 

reporting
organization, or (ii) if the Stock did not trade on such date, the closing price of the Stock on the first day immediately preceding such date on which the Common Stock traded. 

        8.     Term of Options. The term of each Option granted under this Plan shall be for a maximum of ten years from the date of
granting thereof, and a maximum of five years in the case of an ISO granted to a 10% Holder, but may be for a lesser period or be subject to earlier termination as hereinafter provided. 

        9.     Exercise of Options. An Option may be exercised from time to time as to any part or all of the Stock to which the Optionee
shall then be entitled, provided, however, that an Option may not be exercised (a) as to less than 100 shares at any time (or for the remaining shares then purchasable under the Option, if less
than 100 shares), (b) prior to the expiration of at least six months from the date of grant except in case of the death or disability of the Optionee or as otherwise approved by the Committee
and (c) unless the Optionee shall have been in the continuous employ of the Corporation or its subsidiaries from the date of the granting of the Option to the date of its exercise, except as
provided in Paragraphs 12 and 13. The Exercise Price shall be paid in full at the time of the exercise of an Option (i) by certified or bank check or (ii) by the transfer to the
Corporation of shares of its Stock with a fair market value (as determined by the Committee) equal to the purchase price of the Stock issuable upon exercise of such Option; provided, however, that
shares transferred under this subparagraph (ii) must have been continuously owned by the Optionee for at least one year immediately preceding such transfer or such shorter period (but in no
event less than six months) approved by the Committee. The holder of an Option shall not have any rights as a stockholder with respect to the Stock issuable upon exercise of an Option until
certificates for such Stock shall have been delivered to him after the exercise of the Option. 

        10.   Non-transferability of Options. An Option shall not be transferable otherwise than by will or the laws of
descent and distribution and is exercisable during the lifetime of the employee only by him or his guardian or legal representative. 

        11.   Form of Option. Each Option granted pursuant to the Plan shall be evidenced by an agreement (the "Option Agreement")
which shall clearly identify the status of the Options granted thereunder (i.e., an ISO or Non-ISO) and which shall be in such form as the Committee shall from time to time approve. The
Option Agreement shall comply in all respects with the terms and conditions of the Plan and may contain such additional provisions, including, without limitation, restrictions upon the exercise of the
Option, as the Committee shall deem advisable. 

        12.   Termination of Employment. In the event that the employment of an Optionee shall be terminated (otherwise by reason of
death), such Option shall be exercisable (to the extent that such Option was exercisable at the time of termination of his employment) at any time prior to the expiration of a period of time not
exceeding three months after such termination, but not more than ten years (five years in the case of an ISO granted to a 10% Holder) after the date on which such Option shall have been granted.
Nothing in the Plan or in the Option Agreement shall confer upon an Optionee any right to be continued as an employee of the Corporation or its subsidiaries or interfere in any way with the right of
the Corporation or any subsidiary to terminate or otherwise modify the terms of an Optionee's employment, provided, however, that a change in an Optionee's duties or position shall not affect such
Optionee's Option so long as such Optionee is still an employee of the Corporation or one of its subsidiaries. 

        13.   Death of Optionee. In the event of the death of an Optionee, any unexercised portion of such Optionee's Option shall be
exercisable (to the extent that such Option was exercisable at the time of his death) at any time prior to the expiration of a period not exceeding three months after his death but not more than ten
years (five years in the case of an ISO granted to a 10% Holder) after the date on which such Option shall have been granted and only by such person or persons to whom such deceased Optionee's rights
shall pass under such Optionee's will or by the laws of descent and distribution. 

2

 

        14.   Adjustments Upon Changes in Capitalization. In the event of changes in the outstanding Stock of the Corporation by reason
of stock dividends, splitups, recapitalizations, mergers, consolidations, combinations or exchanges of shares, separations, reorganizations or liquidations, the number and class of shares or the
amount of cash or other assets or securities available upon the exercise of any Option granted hereunder and the maximum number of shares as to which Options may be granted to an employee shall be
correspondingly adjusted, to the end that the Optionee's proportionate interest in the Corporation, any successor thereto or in the cash, assets or other securities into which shares are converted or
exchanged shall be maintained to the same extent, as near as may be practicable, as immediately before the occurrence of any such event. All references in this Plan to "Stock" from and after the
occurrence of such event shall be deemed for all purposes of this Plan to refer to such other class of shares or securities issuable upon the exercise of Options granted pursuant hereto. 

        15.   Stockholder and Stock Exchange Approval. This Plan is subject to and no Options shall be exercisable hereunder until
after (i) the approval by the holders of a majority of the Stock of the Corporation voting at a duly held meeting of the stockholders of the Corporation within twelve months after the date of
the adoption of the Plan by the Board, and (ii) the approval by the New York Stock Exchange, Inc. of a listing application covering the shares of Stock covered by this Plan. 

        16.   Amendment of the Plan. The Board shall have complete power and authority to modify or amend the Plan (including the form
of Option Agreement) from time to time in such respects as it shall deem advisable; provided, however, that the Board shall not, without the approval of the votes represented by a majority of the
outstanding Stock of the Corporation present or represented at a meeting duly held in accordance with the applicable laws of the Corporation's jurisdiction of incorporation and entitled to vote at a
meeting of stockholders or by the written consent of stockholders owning stock representing a majority of the votes of the corporation's outstanding stock, (i) increase the maximum number of
shares which in the aggregate are subject to Options under the Plan (except as provided by Paragraph 14), (ii) extend the term of the Plan or the period during which Options may be
granted or exercised, (iii) reduce the Exercise Price, in the case of ISOs below 100% (110% in the case of an ISO granted to a 10% Holder) of the fair market value of the Stock issuable upon
exercise of Options at the time of the granting thereof, other than to change the manner of determining the fair market value thereof, (iv) modify the requirements as to eligibility for
participation in the Plan, (v) with respect to options which are ISOs, amend the plan in any respect which would cause such options to no longer qualify for ISO treatment pursuant to the
Internal Revenue Code or (vi) increase the maximum number of shares of Stock for which any employee may be granted Options under the Plan pursuant to Paragraph 6, (vii) materially
increased the benefits accruing to participants under the Plan, (viii) make any other change to the terms of the Plan which would require approval by the stockholders pursuant to the rules and
regulations of the Securities and Exchange Commission or the listing standards and rules of the securities exchange on which the Stock is listed.. No termination or amendment of the Plan shall,
without the consent of the individual Optionee, adversely affect the rights of such Optionee under an Option theretofore granted to him or under such Optionee's Option Agreement. 

        17.   Taxes. The Corporation may make such provisions as it may deem appropriate for the withholding of any taxes which it
determines is required in connection with any Options granted under the Plan. The Corporation may further require notification from the Optionees upon any disposition of Stock acquired pursuant to the
exercise of Options granted hereunder. 

        18.   Code References and Definitions. Whenever reference is made in this Plan to a section of the Internal Revenue Code, the
reference shall be to said section as it is now in force or as it may hereafter be amended by any amendment which is applicable to this Plan. The term "subsidiary" shall have the meaning given to the
term "subsidiary corporation" by Section 424(f) of the Internal Revenue Code. The terms "Incentive Stock Option" and "ISO" shall have the meanings given to them by Section 422 of the
Internal Revenue Code. The term "10% Holder" shall mean any person who, for purposes of Section 422 of the Internal Revenue Code owns more than 10% of the total combined voting power of all
classes of stock of the employer corporation or of any subsidiary corporation. 

3

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Exhibit 4.01

1997 EMPLOYEE STOCK OPTION PLAN OF CANTEL MEDICAL CORP.

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