EXHIBIT 10.32

 

March 30, 2005

 

Dr. Nassim Usman

2129 Night Sky Lane

Lafayette, CO 80026

 

Re: Addendum to the Employment Letter dated February 11, 2003, as Amended by
Letter dated April 14, 2003

 

Dear Nassim:

 

This letter shall serve as an addendum to the terms of employment letter with
Sirna Therapeutics, Inc. (the “Company”) dated February 11, 2003, as amended by
letter dated April 14, 2003 (the “Employment Agreement”). You hereby acknowledge
your acceptance of and agreement with this addendum (the “Addendum”) on such
terms as detailed below.

 

Capitalized terms used herein and not otherwise defined herein shall have the
meanings ascribed to them in the Employment Agreement.

 

1. Separation from Employment. You shall hereby be deemed to have separated from
your position of employment with the Company with a severance date of March 16,
2005 (the “Severance Date”). Commencing on the date hereof, you shall cease all
activities on behalf of or involving the Company (unless the Company otherwise
requests in writing), including, without limitation, making any presentations
and attending meetings for or on behalf of the Company and you will transition
(unless the Company otherwise requests in writing) (a) all business development
activities to Ms. Rebecca Robison or Dr. Bharat Chowrira of the Company, and (b)
all speaking engagements and other presentation responsibilities to Dr. Barry
Polisky. Within five (5) business days after the Severance Date, the Company
will pay to you all accrued but unpaid salary and all accrued but unused
vacation time (203 hours), less all applicable deductions and withholding. You
are entitled to these payments regardless of whether you sign this Addendum.

 

2. Stock Option Vesting. For the purposes of Section 3(d)(iii) of the Employment
Agreement, your unvested Company stock options will continue to vest, on a
monthly basis, as set forth under Section 3(d)(iii) of the Employment Agreement,
except that such vesting shall terminate upon the earlier to occur of (i) your
obtaining comparable new employment during the Severance Period and (ii)
termination or expiration of the Severance Period as provided herein (either, a
“Vesting Termination Date”). Upon the termination of such vesting period, all of
your unvested and vested options shall cease vesting and you shall have ninety
(90) days to exercise any or all of your vested stock options Following the
Vesting Termination Date, the Company shall extend the option exercise period so
that you may exercise any or all of your vested stock

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options at any time until ten (10) days after the earliest of (x) the expiration
or termination (for any reason) of the Consulting Period (as defined below), (y)
the date of termination of this Addendum pursuant to Section 16 hereof and (z)
notification on or before December 15, 2005 that the options should expire and
no longer be exercisable; and thereafter all of your unexercised vested stock
options will terminate. Under applicable tax laws, your vested stock options
that have not been exercised three (3) months following the Severance Date shall
be treated as non-qualified stock options. You acknowledge that the Company has
not given you any tax advice and that you have relied solely upon your own tax
advisors relating to any and all tax matters relating to this Agreement and the
subject matter hereof.

 

3. Severance Payment. For the purposes of severance payment set forth under
Section 3(d)(iv) of the Employment Agreement, the Company will pay you in
monthly installments (two pay checks per month in accordance with Company’s
standard payroll practices) during the Severance Period (i) one-twelfth (1/12)
of your 2004 Base Salary, and (ii) one-twelfth (1/12) of $25,400 (which is your
annual target bonus equal to the lesser of your full annual target bonus for the
2005 calendar year and the average of your actual annual bonuses for the
previous two (2) calendar years); provided that in the event you obtain other
employment during the Severance Period, your severance payments thereafter shall
be reduced on a prospective basis (to not less than 0) in the amount of cash
compensation received by you during the remainder of such Severance Period. For
the avoidance of doubt, in the event this Addendum is terminated pursuant to
Section 17 hereof, then all severance payments shall cease immediately. For
purposes of this Addendum, the “Severance Period” shall mean the period
commencing on the Severance Date and ending on the earlier of (x) December 15,
2005 and (y) the date of termination of this Addendum pursuant to Section 17
hereof.

 

4. Consulting Arrangement. If, and only if, the exercise period for the options
extends beyond December 15, 2005, then commencing on the date immediately
following the end of the Severance Period and ending on the earlier of (i) the
third anniversary of such date, (ii) the date of termination of this Addendum
pursuant to Section 17 hereof, and (iii) mutual agreement of the parties (the
“Consulting Period”), the Company agrees to engage you as a consultant to the
Company, and you agree to serve as a consultant to the Company, upon the terms
and conditions set forth in this Section 4. You will report to the President and
Chief Executive Officer. You agree to present on behalf of the Company at
conferences and symposia, and perform such other consulting services as may be
requested by the Company to the best of your ability, and generally promote the
Company, its technology and actual and proposed products and services in a
positive manner. You will be paid a consulting fee of $10,000 per year, payable
in equal monthly installments, being an aggregate amount of $30,000 for such
consulting fees payable by the Company to you with respect to the Consulting
Period. You will be entitled to an additional fee of $2,500 per day if and when
requested by the Company to present at a conference or symposium on its behalf,
together with reimbursement for your actual, reasonable out-of-pocket expenses
incurred by you in the performance of such consulting services, including
economy class air travel and hotel, local transportation and similar expenses;
provided that (x) the Company’s prior written approval shall be required for (1)
any travel expenses and (2) any expenses in excess of $100 in the

 

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aggregate incurred in any month, and (y) you shall provide to the Company
documentation in substantiation of all expenses when seeking reimbursement and
otherwise comply with the Company’s expense reimbursement policy and procedures
as in effect from time to time. During the Consulting Period, you will be an
independent contractor, and not an employee, of the Company and shall not have
any power or authority to create any obligation in the name of or on behalf of
the Company. The Company will not withhold from any consulting fees payable to
you any funds for federal, or state or local income taxes, social security,
disability insurance contributions or any other taxes or contributions paid by
employers for employees. The Company shall provide you with an IRS Form 1099
with respect to your consulting fees for federal income tax purposes, and you
assume full and exclusive responsibility and liability for filing any required
federal, state and local income tax forms and paying any and all federal, state
and local taxes as and when due (including, if applicable, quarterly estimated
taxes with respect to any consulting fees paid to you).

 

5. Health Care Coverage. For the purposes of Health Care Coverage provided under
Section 3(d)(v) of the Employment Agreement, the Company agrees to pay premium
costs relating to maintaining Health Care Coverage under COBRA for you and your
dependents for the period of eighteen (18) months after the Severance Date or
such earlier date as may be allowed by law; provided that such Health Care
Coverage shall terminate upon your obtaining comparable Health Care Coverage
from a future employer (after taking into account any waiting periods for such
coverage to become effective). For the avoidance of doubt, you will be
responsible at all times for all deductibles, co-payments, “buy-up” options and
uncovered or unreimbursed medical expenses under such Health Care Coverage for
you and your dependents.

 

6. Outplacement Assistance. The Company agrees to provide you outplacement
assistance with a third party outplacement service firm for a six (6) month
period, at a cost to be paid by the Company to such outplacement service firm
not to exceed $4,000. Any additional costs shall be your sole responsibility.

 

7. Waiver and Release of Claims.

 

        (a) In exchange for the consideration provided under this Addendum, you
freely and voluntarily agree to the Waiver and Release set forth below.

 

        (b) You warrant and represent that you have not previously assigned or
transferred any claim released in this Addendum, and that you shall defend,
indemnify and hold harmless the Company from and against any claim (including
the payment of attorneys’ fees and costs actually incurred whether or not
litigation is commenced) based on or arising out of any such assignment or
transfer made, purported or claimed

 

        (c) Except for the obligations created under this Addendum (which
includes obligations which arise from your Employment Agreement and are
specifically referenced and modified herein), and your rights with respect to
the Company’s stock options granted prior to the date hereof (to the extent such
rights survive the termination of his employment), you, on your behalf, your
heirs, personal representatives, successors and

 

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assigns (collectively the “Usman Releasers”), hereby jointly and severally fully
and forever release, acquit and discharge the Company and its successors,
partners, officers, directors, employees, agents, and any related party which
includes all subsidiaries, affiliates, and parent corporations or entities,
their respective heirs, personal representatives, successors and assigns (each
an “Usman Releasee” and collectively the “Usman Releasees”), of and from any and
all claims, counterclaims and causes of action whatsoever which the Usman
Releasers, jointly and severally, ever had, now have, or hereafter can, shall or
may have against the Usman Releasees, jointly and severally, arising out of or
in connection with the your employment with the Company, including the
termination of said employment.

 

This release includes, but is not limited to: all claims based on your
employment by and termination from the Company, including all claims arising
under or in connection with any U.S. federal, state and municipal law, including
without limitation, the Colorado Anti-Discrimination Act of 1957, as amended;
the Age Discrimination Act of 1967, as amended (“ADEA”); the Americans with
Disabilities Act of 1990, as amended; Title VII of the Civil Rights Act of 1964,
as amended; the Civil Rights Act of 1991, as amended; the Civil Rights Acts of
1866 and 1871, as amended; the Equal Pay Act; the Fair Labor Standards Act; the
Family and Medical Leave Act; the National Labor Relations Act; the Occupational
Safety and Health Act, the Older Workers Benefit Protection Act of 1990; the
Rehabilitation Act of 1973, Executive Order 11246; the Colorado Civil Rights
Act; the Colorado Labor Peace Act; the Employee Retirement Income Security Act
of 1974, as amended; and the common law of the State of Colorado, for tort,
breach of express or implied employment contract, wrongful discharge,
intentional infliction of emotional distress, and defamation or injuries
incurred on the job or incurred as a result of loss of employment. Except for
the claims referenced in the first sentence of this paragraph, you understand
and agree that you are waiving and releasing any and all claims that you now
have against the Company, regardless of their nature or origin, and the fact
that such claim is not listed in the paragraphs of this Section 7(c) above, does
not mean that such claim is not included in this Addendum. Except for the claims
referenced in the first sentence of this Section 7(c), you expressly covenant
not to sue the Company for any claims, whether known or unknown, suspected or
unsuspected, arising from your employment relationship with the Company or any
claims existing as of this date. You acknowledge and represent that except as
arising out of this Addendum, the Company has paid all salary, wages, bonuses,
accrued vacation, commissions and any and all other compensation and benefits
due to you (including any compensation and benefits due under your Employment
Agreement which are not specifically referred to in this Addendum).

 

        (d) Age Discrimination In Employment Act Waiver. You expressly
acknowledge and agree that, by entering into this Addendum and receiving
consideration in exchange for it, you are waiving any and all rights or claims
that you may have arising under the ADEA which have arisen on or before the date
of execution of this Addendum. You further expressly acknowledge and agree that:

 

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                (i) in return for this Addendum, you will receive compensation
and/or consideration beyond that which you were already entitled to receive
before entering into this Addendum;

 

                (ii) you have been advised by the Company and is hereby advised
in writing by this Addendum to consult with an attorney before signing this
Addendum;

 

                (iii) you were given a copy of this Addendum, and informed that
you have 21 days within which to consider the Addendum; and

 

                (iv) you are informed that you have seven (7) days following the
date of execution of the Addendum in which to revoke the Addendum.

 

In order to revoke this Addendum, you must provide such revocation in writing
and deliver it to the Company within seven (7) days following the date of
execution of this Addendum, at the following address:

 

Sirna Therapeutics, Inc.

2950 Wilderness Place

Boulder, CO 80301

Attention: Director Human Resources

 

8. Continuing Obligation to Preserve the Company’s Confidential Information and
to Abide by Assignment of Inventions. You acknowledge that by reason of your
position with the Company you have been given access to confidential information
with respect to the scientific and business affairs of the Company. You must
continue to maintain and abide by the terms of the Non-Disclosure Agreement that
was signed upon commencement of employment. You represent that you have held all
covered information acquired during employment confidential and will continue to
do so. You further agree that you will not disclose, or cause to be disclosed in
any way, any confidential information or documents obtained as a result of or in
connection with your employment or consulting engagement with the Company to any
third person, without the express, written consent of the Company, except and
only to the extent reasonably required for the purpose of enforcing this
Addendum, should that ever be necessary. Furthermore, you agree to abide by
obligations of assignment in accordance with the Assignment of Inventions
Agreement signed upon commencement of employment.

 

9. Continuing Obligation Not to Compete. The terms of your Non-Competition and
Non-Solicitation Agreement dated February 11, 2003 (the “Non-Competition
Agreement”) shall continue and survive in full force and effect, except that the
duration of the covenants and agreements set forth therein shall continue until
the later of (i) one (1) year after the end of the Severance Period and (ii)
provided that the exercise period for the options is extended beyond December
15, 2005, the termination or expiration of the Consulting Period. In addition,
the Field of Interest (as defined in the Non-Competition Agreement) is hereby
expanded to include the field of RNA interference or related technology-based
products, services or technology.

 

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10. Modification of Entire Agreement. This Addendum may be modified by a writing
duly signed by you and the Company. It is further understood and agreed that
this Addendum, together with the Employment Agreement (to the extent modified
herein), and other agreements expressly referenced herein, is the entire
agreement between the parties, and that no promises, representations,
understandings, or warranties have been made by any party respecting the subject
of this Addendum, and that all such agreements are contained herein. The parties
agree that Section 8 (Indemnification) of the Employment Agreement survives the
termination of your employment with the Company and remains in full force and
effect.

 

11. Confidentiality. You agree from the date of the execution of this Addendum,
that you shall maintain the confidentiality of the existence and terms of this
Addendum, and will not disclose same except as required by law or for internal
business reasons of the Company, and except to the extent you are required to
disclose same to your immediate family, or to those persons necessary for the
preparation and filing of your tax returns, or for the seeking of legal counsel.
You will advise such persons that the terms of this Addendum are confidential
and must be treated as such by these persons.

 

12. Non-disparagement by You. You agree that you will not make any disparaging
remarks of any kind or nature whatsoever against the Company or your employment
with the Company. This provision includes refraining from any disparaging
remarks, made publicly or privately, about or concerning the Company’s officers,
directors, or any of the Company’s actual or proposed technologies, products,
services or business plans or engaging in other conduct that, in the reasonable
good faith judgment of the Company, is reasonably likely to have or actually has
an adverse effect upon or is reasonably likely to be or actually is detrimental
to, the Company’s officers, directors, stockholders, employees or agents, or any
of the Company’s actual or proposed technologies, products services or business
plans, provided, however, that in the event that the Company seeks to terminate
this Addendum pursuant to Section 17(a) as a consequence of your breach of the
provisions of this Section 12, the Company shall give you written notice of the
proposed termination, including specific details of the conduct that forms the
basis for the Company’s decision and, if you request in writing within three (3)
business days after receipt of such notice, the Company shall provide you an
opportunity within five (5) days of such written notice to communicate with a
member of the Company’s Board of Directors in an effort to prove that no such
breach occurred. In no event shall this Addendum or the Company’s obligations
contained herein be terminated pursuant to Section 17(a) unless and until the
Company has satisfied the notice and opportunity to be heard provisions of this
Section 12. If, notwithstanding the same, the Company believes in good faith
that such breach has occurred, it may terminate this Addendum and its
obligations hereunder as provided in Section 17. The parties agree that nothing
in this Section 12 shall prohibit you from truthfully responding to any
inquiries from the Company, including members of its Board of Directors, during
the Severance Period, while you are acting as a Consultant or from responding to
legal inquiries.

 

13. Non-disparagement by the Company. The Company agrees that it and its
officers in their official capacity while representing the Company, will not
make any

 

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disparaging remarks of any kind or nature whatsoever against you or your
employment with the Company. This provision includes the Company refraining from
making any disparaging remarks, made publicly or privately, about you or your
abilities. However, the Company shall not be responsible or liable for any
unauthorized remarks made by its directors, stockholders, employees or agents.

 

14. Return of Company Property. You will immediately return to the Company all
Company property and proprietary information, including business records, client
files, documents, reports, communications, working papers, phones, credit cards,
wireless equipment currently in your possession. Notwithstanding the foregoing,
you are hereby authorized by the Company to retain (a) any Macintosh computer
equipment and software, and (b) one Blackberry handheld device (unit only, not
including any wireless service for which you will be responsible), which were
provided to you during your employment with the Company. These items are
provided to you “AS IS,” without recourse, representation or warranty, and the
Company hereby disclaims any and all warranties, express or implied, including,
without limitation, any warranty of merchantability or fitness for any
particular purpose.

 

15. No Admission. The parties agree that the facts recited in this Addendum are
recited only for purposes of this document, and are not intended by the parties
for use, nor shall they be used as admissions or stipulations admissible in any
other litigation, and that, by entering into this Addendum, the Company does not
establish any policy or practice thereby.

 

16. Expenses Associated with this Agreement. The Company shall reimburse you for
all expenses incurred by you in the preparation, review and negotiation of this
Addendum, including, without limitation, reasonable attorneys’ fees and
accountants’ fees; provided, however, that the Company’s obligation to reimburse
you for such expenses shall not exceed $2,000 in the aggregate.

 

17. Termination.

 

(a) The Company shall have the right to terminate this Addendum following any
material breach or default in performance by you under this Addendum (including,
without limitation, any breach of terms and conditions set forth in Section 12),
the Non-Disclosure Agreement, Assignment of Inventions Agreement or the
Non-Competition Agreement (as amended hereby), or any stock option agreement or
other agreement relating to the Company to which you are a party, including its
obligation to make any further payments to you, and the further vesting of your
stock options shall immediately cease.

 

(b) Except as otherwise provided in Section 12 hereof, the termination of this
Addendum by the Company pursuant to this Section 17 shall become effective upon
the Company giving you written notice of such termination.

 

(c) In the event the Company terminates this Addendum as provided herein, all of
Company’s obligations hereunder shall cease immediately. In addition, your
vested

 

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stock options shall terminate ten (10) days thereafter as provided in Section 2
hereof, unless previously exercised by you.

 

(d) Notwithstanding the foregoing, Sections 7 through 18 shall survive the
termination or expiration of this Addendum.

 

17. Arbitration. Any dispute or controversy between you and the Company (or any
other Usman Releasee who agrees to arbitrate) in any way arising out of, related
to, or connected with this Addendum (including any proceedings to rescind this
Addendum) or the subject matter thereof, or otherwise in any way arising out of,
related to, or connected with your employment with the Company, shall be
resolved through final and binding arbitration in Boulder, Colorado, pursuant to
applicable federal or state law. By agreeing to arbitrate such claims, the
parties recognize that they are waiving their right to have such claims heard by
a jury. In the event of such arbitration, the prevailing party shall be entitled
to recover all costs and expenses incurred by such party in connection
therewith, including reasonable attorneys’ fees. Any dispute as to the
reasonableness of costs and expenses shall be determined by the arbitrator.

 

 

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

 

Sincerely,

 

SIRNA THERAPEUTICS, INC.

 

By:    /s/ Howard W. Robin            

Name: Howard W. Robin

Title:   President & CEO

 

Approved:

 

COMPENSATION COMMITTEE OF SIRNA THERAPEUTICS, INC.

 

By:    /s/ Bryan Roberts            

Name: Bryan Roberts

Title:   Chairman of the Compensation Committee

 

Agreed and accepted:

 

            /s/ Nassim Usman            

Nassim Usman

 

Dated: March 30, 2005

 

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