Exhibit 10.1

 

November 30, 2007

 

Kleanthis Xanthopoulos

6305 El Camino Del Teatro

La Jolla, CA  92037

 

Dear Kleanthis,

 

It is my pleasure to extend to you an offer to join Regulus Therapeutics, a
joint venture between Isis Pharmaceuticals, Inc. and Alnylam Pharmaceuticals, as
President and CEO reporting to me. In this position, you will receive an
annualized salary of $400,000 and be eligible for an incentive bonus targeted at
30% of your base salary (established by your Isis Senior Vice President Level).
You will also receive $25,000 annually as a consultant to Alnylam. In addition,
you will receive a one-time signing bonus of $200,000 ($100,000 to be paid by
Regulus and $100,000 to be paid by Alnylam) payable your first week of
employment.

 

As additional incentive, the management of Isis Pharmaceuticals and Alnylam
Pharmaceuticals will each grant you an option to purchase 60,000 shares of
common stock. The exercise price for the Isis options will be the fair market
value on your first day of employment. Isis’ options will be non-qualified
options and vest over a four-year period and contain the other terms described
in Isis’ Stock Option Plan. Alnylam’s stock options will be non-qualified
options and will be subject to the standard terms and conditions of the 2004
Alnylam Stock Option Plan, and the exercise price will be equal to the closing
price of the common stock on your first day of employment at Isis. These options
will vest over four years at the rate of 25% after twelve months of full-time
active employment and then an additional 6.25% for each additional quarter of
full-time active employment until after four full years when the option is fully
vested.

 

Vesting of both Isis and Alnylam options will terminate December 31, 2009 (one
year after Regulus becomes a C Corporation) as long as you continue to be an
employee of Isis or Regulus.

 

Provided you are still an employee of Isis or Regulus on January 1, 2009, you
will receive an option to purchase 5% ownership in Regulus based on a mutually
agreed upon valuation at that time, exercisable at a price reflecting such
valuation. If we cannot mutually agree on a valuation we will engage a mutually
acceptable outside expert to do so.

 

Additionally, you will be provided the opportunity to enter into a severance
agreement having the following terms:  18 months of salary continuation in
“change of control” (e.g. Regulus is bought by Isis, Alnylam or a 3rd party)
resulting in loss of job, elimination of the job or

 

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constructive termination. The severance agreement will also provide for 18
months of salary continuation if Isis or Alnylam is bought and you suffer a job
loss, elimination of the job or constructive termination. The severance
agreement will also provide for 18 months of salary continuation if fired for no
cause. The severance agreement will contain a customary provision releasing
Isis, Alnylam and Regulus from liability. Pending approval of the Isis, Alnylam
and Regulus Boards of Directors, we will provide that your options immediately
vest, if one of the above mentioned salary continuation events occur.

 

While you are an employee of Isis you will have the opportunity to participate
in Isis’ employee benefits program, which includes medical, dental, life
insurance and our 401(k) Retirement Plan and your vacation will begin accruing
at the rate of three (3) weeks per year based on your anniversary date. If you
have any questions, please feel free to contact Shannon Devers at (760)
603-3848.

 

On your first day of employment, please complete and bring with you the enclosed
Employee Confidential Information and Inventions Agreement. You will also need
to bring identification as listed on the back of the enclosed I-9 form, which is
required as proof of eligibility-to-work.

 

If you accept this offer and the terms herein, please sign below and return the
original as soon as possible. You may retain the enclosed signed copy for your
records. We are anticipating a start date of Monday, December 3, 2007.

 

Sincerely,

 

/s/ Stanley T. Crooke

 

 

Stanley T. Crooke

Chairman and CEO

Isis Pharmaceuticals, Inc.

 

 

Accepted and agreed:

 

/s/ Kleanthis Xanthopoulos, PhD

 

Kleanthis Xanthopoulos, PhD

 

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