EXHIBIT 10.2

 

March 10, 2004

 

Dr. Roberto Guerciolini

41 Cranmore Road

Wellesley, MA 02481

 

Dear Roberto:

 

This letter shall serve to set forth the terms of employment offered to you by
Sirna Therapeutics, Inc. (the “Company”) and acknowledge your acceptance of the
employment on such terms as detailed below. This letter (agreement) shall become
effective upon the mutually agreed upon start date of your employment with the
Company (the “Effective Time”).

 

Capitalized terms used herein and not otherwise defined herein shall have the
meanings ascribed to them on Attachment A hereto, which is incorporated herein.

 

1. Positions and Scope of Employment. Upon the Effective Time, you shall serve
as Senior Vice President of Development and Chief Medical Officer of the
Company. You shall render such business and professional services in the
performance of your duties, (a brief outline of position responsibilities is
attached herein as Attachment E) consistent with your position within the
Company, consistent with the Bylaws of the Company and as shall reasonably be
assigned to you by the Company’s President and Chief Executive Officer and/or
the Board of Directors (the “Board”), and you shall report directly to the
President and Chief Executive Officer. You shall perform your duties faithfully
and to the best of your ability and shall devote your full business efforts and
time to the Company.

 

2. Compensation.

 

(a) Base Salary; Annual Reviews. During the period beginning as of the Effective
Time and ending on December 31, 2004, the Company shall pay to you as
compensation for your services a base salary at the annualized rate of $300,000
(the “Base Salary”). Thereafter, your Base Salary shall be subject to annual
performance review by the President and Chief Executive Officer for appropriate
upward adjustment, and you will be considered for additional grants of stock
options in connection with each annual review by the Board. Your Base Salary
shall be paid in accordance with the Company’s normal payroll practices.

 

(b) Bonus. In each calendar year of your employment with the Company you shall
be eligible to earn a bonus, including the entire 2004 calendar year. The annual
bonus shall be based upon attainment of reasonable and achievable goals which
shall be mutually agreed upon by you and the President and Chief Executive
Officer. The amount of the annual bonus which you shall be eligible to earn
shall be equal to twenty percent (25%) of your then current annual Base Salary
in the event you achieve such goals. Your bonus shall be reasonably increased or
decreased based on the overachievement or underachievement of such goals. Such
bonus shall be payable in a cash lump sum within sixty (60) days after the end
of the calendar year with respect to which the bonus is payable.

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(c) Options. The Company shall grant to you stock options to purchase 300,000
shares of the Company’s common stock. The stock option grant shall be governed
by the terms of Company’s Stock Option Plan and the exercise price for the stock
option will be the NASDAQ market closing price per share on the start date of
employment with the Company. Such options shall be exercisable for a period of
ten (10) years at an exercise price equal to the Fair Market Value (as defined
in the Company’s stock option plan) on the date of the stock option grant.
Twenty five percent (25%) of the stock options granted herein shall vest on an
annual basis during the first year of your employment with the Company and the
remaining seventy five percent (75%) of the stock options shall vest thereafter
on a monthly basis over a period of four (4) years beginning on the Effective
Time (so as to be fully vested at the end of a period of four (4) years after
the Effective Time). Each stock option grant shall be in the form of incentive
stock options in the maximum amount permitted by applicable law.

 

(d) Employee Benefits. During your employment with the Company, you shall be
entitled to participate in the employee benefit plans currently and hereafter
maintained by the Company, which shall include, without limitation, the
following:

 

(i) group PPO medical and dental insurance plans (the coverage under which shall
include your dependents and contain no restrictions relative to pre-existing
conditions and no waiting period prior to coverage becoming effective);

 

(ii) short-term disability insurance and long-term disability insurance (which
coverage shall contain no restrictions relative to pre-existing conditions);

 

(iii) term life insurance in the amount of $500,000, with your having the right
to designate the beneficiary(ies) thereof;

 

(iv) participation in the Company’s 401(k) plan, your contributions to which may
be matched by the Company with contributions of shares of its common stock if
approved by the Board; provided that any such matching contributions shall vest
over three (3) years of service (you can enroll on the first available date
allowed under the plan following the Employment Time);

 

(v) participation in the Company’s Flexible Spending Account; and

 

(vi) participation in the Company’s Stock Purchase Plan, allowing purchase of
shares of the Company’s common stock at fifteen percent (15%) below the market
price (you can enroll on the first available date allowed under the Plan
following the Employment Time).

 

The Company reserves the right to revise, add or rescind any benefits at any
time for its employees generally; provided that any such permitted revision,
addition or rescission of benefits by the Company shall be without prejudice to
your rights provided in Section 4(d) hereof.

 

(e) Vacation Days; Sick Days; Holidays. You shall be entitled to paid vacation,
sick days and holidays in accordance with the Company’s policies as in effect
from time to time, as well as all applicable state and federal laws.

 

(f) Expenses. The Company shall reimburse you for reasonable travel,
entertainment or other expenses incurred by you in the furtherance of or in
connection with the

 

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performance of your duties on behalf of the company and/or for Company approved
personal professional development in accordance with the Company’s expense
reimbursement policy as in effect from time to time.

 

3. Termination.

 

(a) At-Will Employment. You and the Company agree that your employment with the
Company shall be “at-will” employment, that you are free to resign and, subject
to the provisions hereof, the Company is free to terminate your employment at
any time for any reason or no reason.

 

(b) Voluntary Termination; Termination for Cause. In the event that your
employment with the Company is terminated voluntarily by you or for Cause by the
Company, then (i) all options which have vested shall continue to be exercisable
in accordance with the terms of the Company’s stock option plan and applicable
legal requirements; (ii) all payments of Base Salary and bonuses accrued but
unpaid on the date of termination, as well as all expenses incurred to the date
of termination, shall be due and payable to you immediately and all further
compensation by the Company to you hereunder shall terminate as of the date of
termination; and (iii) you shall be entitled to continue medical and dental
insurance coverage for yourself and your dependents, at your expense, at the
same level of coverage as was provided to the you under the Company’s insurance
plan immediately prior to the termination (“Health Care Coverage”) by electing
COBRA continuation coverage (“COBRA”) in accordance with applicable law.

 

(c) Termination upon Death or Disability. In the event that your employment with
the Company is terminated as a result of your death or permanent disability then
(i) all options which have vested shall continue to be exercisable in accordance
with the terms of the Company’s stock option plan and applicable legal
requirements; (ii) the Company shall pay to you, your estate or your designated
trust, as applicable, all payments of Base Salary and bonuses accrued but unpaid
on the date of termination, as well as expenses incurred to the date of
termination, immediately upon the date of termination and all further
compensation by the Company to you hereunder shall terminate as of the date of
termination; and (iii) you shall be entitled to continue medical and dental
insurance coverage for yourself and your dependents, at your expense, at the
same level of coverage as was provided to you under the Company’s Health Care
Coverage by electing COBRA in accordance with applicable law. For purposes
hereof, the term “permanent disability” shall mean your inability to perform
your duties as they exist at the time disability commences on account of
illness, accident or other physical or mental incapacity which shall continue
for a consecutive period of ninety (90) days or an aggregate of one hundred
twenty (120) days in any consecutive twelve-month period.

 

(d) Termination without Cause or for Good Reason. In the event that your
employment with the Company is terminated by the Company without Cause or by you
for Good Reason, then (i) all options which have vested shall continue to be
exercisable in accordance with the terms of the Company’s stock option plan and
applicable legal requirements; (ii) all payments of Base Salary and bonuses
accrued but unpaid on the date of termination, as well as all expenses incurred
to the date of termination, shall be due and payable to you immediately; (iii)
subject to the provisions of Section 4 hereof, your unvested options shall
continue to vest, on a monthly basis, during the applicable nine (9) or twelve
(12) month severance period described in Section 3(d)(iv) below, but such
continuing vesting of your unvested options shall cease upon your obtaining new
comparable employment during the applicable severance period; (iv) the Company
shall pay to you a severance payment, in monthly installments, equal to your
Base Salary plus the lesser of your full annual target bonus for the then
current calendar year (which shall be equal to

 

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twenty percent (20%) of your then current Base Salary) or the average of your
actual annual bonuses for the previous two (2) calendar years, for a period of
nine (9) months; provided, however, that in the event you are terminated as a
result of a Change of Control (whether due to termination without Cause or your
termination for Good Reason following a Change of Control), the amount of such
severance payment shall be twelve (12) months’ severance; provided, further,
that in the event you obtain other employment during the applicable nine (9) or
twelve (12) month severance period, your severance payments thereafter shall be
reduced on a prospective basis (not to less than 0) in the amount of cash
compensation received by you during the remainder of such applicable severance
period; and (v) the Company shall be responsible for all costs relating to
maintaining your Health Care Coverage for you and your dependents under COBRA
for the shorter of eighteen (18) months or for so long as allowed by law;
provided, however, that such Health Care Coverage shall terminate upon your
obtaining comparable Health Care Coverage from a future employer (after
completing any waiting periods for such coverage to become effective).

 

4. Change of Control. Notwithstanding anything to the contrary contained herein,
in the event of a Change of Control of the Company, then (i) all options which
have vested shall continue to be exercisable in accordance with the Company’s
stock option plan and applicable legal requirements; (ii) one hundred percent
(100%) of the unvested options shall vest immediately if your employment is
terminated by you for Good Reason within six (6) months after a Change of
Control or if, during the period from ninety (90) days prior to the commencement
or public announcement of a Change of Control until two (2) years after a Change
of Control, your employment with the Company is terminated by the Company other
than for Cause; and (iii) to the extent that such Change of Control results in
your termination, whether by the Company without Cause or by you for Good
Reason, the Company shall pay to you a severance payment in accordance with the
provisions of Section 3(d) above. Notwithstanding the foregoing, to the extent
that the acceleration of vesting as contemplated in clause (ii) above shall
cause the options to not qualify as incentive stock options under applicable tax
laws, you shall be entitled to require that the Company not accelerate the
vesting of all or part of your unvested stock options in such manner as shall
preserve the status of the options as incentive stock options.

 

5. Non-Disclosure and Non-Competition Agreement and Invention Assignment
Agreement. You will enter into the Company’s standard Non-Disclosure and
Non-Competition Agreement and Invention Assignment Agreement upon commencing
employment hereunder, in the forms of Attachment B and Attachment C hereto.

 

6. Directors’ and Officers’ Liability Policy. You will be covered under the
Company’s directors’ and officers’ liability insurance policy, which shall
provide coverage in an amount and upon terms customary to similarly situated
companies. The Company shall maintain a policy throughout the duration of your
employment.

 

7. Expenses associated with this Agreement. The Company shall reimburse you for
all expenses incurred by you in the preparation, review and negotiation of this
Agreement, including, without limitation, reasonable attorneys’ fees and
accountants’ fees.

 

8. Relocation Expenses associated with this Agreement. Terms for reimbursement
of expenses associated with your relocation from Wellesley, Massachusetts to
Colorado, shall be in accordance with the terms set forth in enclosed Attachment
D. If employment is terminated voluntarily or for cause within one (1) year of
payment/reimbursement by Company then 100% of relocation expenses are to be
promptly (but in no event later than 30 days following the termination) repaid
to Company.

 

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9. Indemnification. The Company agrees that if you are made a party or are
threatened to be made a party to any action, suit or proceeding, whether civil,
criminal, administrative or investigative (a “Proceeding”), by reason of the
fact that you are or were a director, officer, employee or agent of the Company
or any subsidiary or affiliate of the Company, whether or not the basis of such
Proceeding is alleged action in an official capacity as a director, officer,
employee or agent, you shall be indemnified and held harmless by the Company to
the fullest extent authorized by Delaware law, as the same exists or may
hereafter amended, against all damages, losses, judgments, liabilities, fines,
penalties, excise taxes, settlements and costs, including reasonable attorneys’
fees, accountants’ fees and disbursement, incurred or suffered by you in
connection therewith (including the advancement of your defense costs and
expenses as and when incurred) and such indemnification shall continue as to you
even if you have ceased to be an officer, director or agent and are no longer
employed by the Company and shall inure to the benefit of your heirs, executors
and administrators.

 

10. Assignment. This Agreement shall be binding upon and inure to the benefit of
(a) your heirs, executors and legal representatives upon your death and (b) any
successor or assignee of the Company. Any successor of the Company shall be
deemed substituted for the Company under the terms of this Agreement for all
purposes. For this purpose, “successor” means any person, firm, corporation or
other business entity which at any time, whether by purchase, merger or
otherwise, directly or indirectly acquires all or substantially all of the
assets or business of the Company.

 

11. Notices. All notices, requests, demands and other communications provided
hereunder shall be in writing and shall be deemed given (i) on the date of
delivery if delivered personally, (ii) one (1) day after being sent by a well
established commercial overnight service, or (iii) four (4) days after being
mailed by registered or certified mail, return receipt requested, prepaid and
addressed to the parties or their successors at the following addresses, or at
such other addresses as the parties may later designate in writing:

 

If to the Company:

 

SIRNA THERAPEUTICS, INC.

2950 Wilderness Place

Boulder, Colorado 80301

Attn: President & CEO

 

If to you:

 

at the last residential address known by the Company.

 

12. Severability. In the event that any provision hereof becomes or is declared
by a court of competent jurisdiction to be illegal, unenforceable or void, this
Agreement shall continue in full force and effect without said provision.

 

13. Integration. Upon the Effective Time, this Agreement, together with the
Non-Disclosure Agreement, Invention Assignment Agreement and the
Non-Competition/Non-Solicitation Agreement, represents the entire agreement and
understanding between the parties as to the subject matter herein and supersedes
all prior or contemporaneous agreements whether written or oral. No waiver,
alteration, or modification of any of the provisions of this Agreement shall be
binding unless in writing and signed by duly authorized representatives of the
parties hereto.

 

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14. Governing Law. This Agreement shall be governed by and interpreted in
accordance with the laws of the State of Colorado, without reference to
principles of conflict of laws.

 

15. Effective Time. This Agreement shall become effective at the Effective Time.

 

Please sign this Agreement and return one signed original copy to me,
acknowledging your agreement with and acceptance of these terms of employment.

 

Sincerely,

SIRNA THERAPEUTICS, INC.

By:

 

/s/ Howard W. Robin

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Name:

 

Howard W. Robin

Title:

 

President & CEO

 

Agreed and accepted:

/s/ Roberto Guerciolini

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Roberto Guerciolini

Dated: March 12, 2004

 

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Attachment A

 

DEFINITIONS

 

Cause. “Cause” is defined as (i) conviction of a felony crime involving moral
turpitude, (ii) an intentional action or intentional failure to act which was
performed in bad faith and to the material detriment of the Company, (iii)
continued intentional refusal or intentional failure to act in accordance with
any lawful and proper direction or order of the Board, (iv) willful and habitual
neglect of the duties of employment, or (v) breach of the Non-Disclosure
Agreement, contemplated hereunder; provided, however, that with respect to the
events of “cause” described under clauses (ii) through (v) above, the Company
shall have first provided to you written notice describing the nature of the
event and, thereafter, provided a reasonable opportunity to cure such event,
which reasonable opportunity shall in no event be less than thirty (30) days
following receipt of such notice.

 

Change of Control. “Change of Control” of the Company is defined as: (i) any
“person” (as such term is used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended) becomes the “beneficial owner” (as defined in
Rule 13d-3 under said 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; or (ii) the consummation of
a merger or consolidation of the Company with any other corporation that has
been approved by the stockholders of the Company, 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) more than fifty percent (50%) of the total voting power
represented by the voting securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation, or the stockholders
of the Company approve a plan of complete liquidation of the Company; or (iii)
the consummation of the sale or disposition by the Company of all or
substantially all the Company’s assets; or (iv) when the individuals who on the
date hereof constitute the Board and any new director (other than a director
designated by a person or entity who has entered into an agreement to effect a
transaction described in clause (i), (ii) or (iii) above), whose nomination
and/or election to the Board was approved by a vote of at least a majority of
the directors still in office who either were directors on the date hereof or
whose election or nomination for election was previously approved, cease for any
reason constitute a majority of the Board.

 

Good Reason. “Good Reason” is defined as your voluntary resignation from your
employment with the Company upon the occurrence of any of the following without
your express written consent: (i) the assignment to you of any duties or
responsibilities inconsistent with the scope of the duties or responsibilities
associated with your titles or positions or any diminution to or adverse change
of your titles, positions, status or circumstances of employment; (ii) a
reduction by the Company in your Base Salary or bonus target percentage or,
absent a good business reason, of the facilities, benefits and perquisites
available to you immediately prior to such reduction; (iii) the taking of any
action by the Company which would adversely affect your participation in, or
reduce your benefits under, the Company’s benefit plans (including equity
benefits) as of the date of execution hereof, except to the extent that the
benefits of all other employees of the Company are similarly reduced; provided,
that regardless of whether the Company may similarly reduce the benefits of
other employees, it shall constitute Good Reason in the event the Company takes
any action which would adversely affect your participation in, or

 

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adversely affect or reduce in any material aspect your benefits under, the
Company’s medical, dental, short-term disability and/or long-term disability
benefit plans or arrangements; (iv) a relocation of your principal office to a
location more than thirty (30) miles from Boulder, Colorado, except for
reasonable periods of required travel on Company business; (v) any breach by the
Company of any material provision of this Agreement; or (vi) any failure by the
Company to obtain the assumption of this Agreement in writing by any successor
or assign of the Company.

 

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