Exhibit 10.1

EMPLOYMENT AGREEMENT

This EMPLOYMENT AGREEMENT (the “Agreement”) is made and entered into effective
as of June 16, 2014 (the “Effective Date”), by and between REGULUS THERAPEUTICS
INC., a Delaware corporation (the “Company”), and PAUL C. GRINT, M.D. (the
“Executive”). The Company and the Executive are hereinafter collectively
referred to as the “Parties”, and individually referred to as a “Party”. From
and following the Effective Date, this Agreement shall replace and supersede
that certain Offer Letter Agreement between Executive and Regulus Therapeutics
Inc. dated April 25, 2014 (the “Prior Agreement”).

RECITALS

WHEREAS, the Company desires to employ Executive to provide personal services to
the Company, and wishes to provide Executive with certain compensation and
benefits in return for his services, and Executive wishes to be so employed and
to receive such benefits; and

WHEREAS, the Company and Executive wish to enter into this Agreement to define
their mutual rights and duties with respect to Executive’s compensation and
benefits.

NOW, THEREFORE, in consideration of the mutual promises and covenants contained
herein, and for other good and valuable consideration, the Parties, intending to
be legally bound, agree as follows:

AGREEMENT

 

  1. EMPLOYMENT.

1.1 Term. The term of this Agreement shall begin on the Effective Date, and
shall continue until terminated in accordance with Section 5 herein.

1.2 Title. The Executive shall serve as the Company’s Chief Medical Officer and
shall serve in such other capacity or capacities as the Board of Directors of
the Company (the “Board”) may from time to time prescribe, but only as
consistent with the customary duties of a Chief Medical Officer. The Executive
will also initially be a member of the Regulus Strategic Committee and may
continue such membership as determined by the Chief Executive Officer of the
Company in his sole discretion.

1.3 Duties. The Executive shall report to the Chief Executive Officer of the
Company and shall do and perform all reasonable services, acts or things
necessary or advisable to manage and conduct the business of the Company and
which are normally associated with the position of a Chief Medical Officer,
consistent with the bylaws of the Company and as required by the Board or the
management of the Company.

1.4 Location. The Executive shall perform services pursuant to this Agreement at
the Company’s offices located in San Diego, California, or at any other place at
which the Company maintains an office; provided, however, that the Company may
from time to time require the Executive to travel temporarily to other locations
in connection with the Company’s business.

 

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  2. LOYAL AND CONSCIENTIOUS PERFORMANCE.

2.1 Loyalty. During the Executive’s employment by the Company the Executive
shall devote the Executive’s full business energies, interest, abilities and
productive time to the proper and efficient performance of the Executive’s
duties under this Agreement.

2.2 Non-Company Business. While employed by the Company, Executive shall not,
without the Company’s prior written consent, (i) render to others, services of
any kind for compensation, or engage in any other business activity that would
materially interfere with the performance of Executive’s duties under this
Agreement, or (ii) directly or indirectly, whether as a partner, employee,
creditor, shareholder, or otherwise, promote, participate or engage in any
activity or other business competitive with the Company’s business. Executive
may serve as a member of the board of directors of other companies or
organizations provided that Executive notifies the Board in advance of
commencing any such membership and the Board determines that such membership
does not conflict with Executive’s obligations to the Company. Executive shall
not invest in any company or business which competes in any manner with the
Company; provided that, Executive may, without violating this section, own, as a
passive investment, shares of capital stock of a publicly-held corporation that
engages in competition if (i) such shares are actively traded on an established
national securities market in the United States, (ii) the number of shares of
such corporation’s capital stock that are owned beneficially (directly or
indirectly) by the Executive represents less than one percent of the total
number of shares of such corporation’s outstanding capital stock, and
(iii) Executive is not otherwise associated directly or indirectly with such
corporation or with any affiliate of such corporation.

 

  3. COMPENSATION OF THE EXECUTIVE.

3.1 Base Salary. The Company shall pay the Executive a base salary at the rate
of $360,500 per year (the “Base Salary”), less payroll deductions and all
required withholdings, payable in regular bi-weekly payments or otherwise in
accordance with Company policy. Such Base Salary shall be prorated for any
partial year of employment on the basis of a 365-day fiscal year.

3.2 Discretionary Bonuses. In addition to the Base Salary, the Executive will be
eligible to receive a yearly discretionary merit bonus pursuant to the Company’s
annual performance bonus plan, with a target amount of such bonus equal to 35%
of Executive’s Base Salary (the “Annual Bonus”). Whether Executive receives an
Annual Bonus for any given year, and the amount of any such Annual Bonus, will
be determined by the Board in its sole discretion based upon the Company’s and
Executive’s achievement of objectives and milestones to be determined on an
annual basis by the Board. Executive must remain an active employee through the
end of the applicable performance period in order to earn an Annual Bonus for
that year and any such bonus will be paid in a lump sum prior to March 15 of the
year following the year in which Executive’s right to such amount became vested.

 

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3.3 Equity Compensation. Contingent on your commencement of employment and
subject to approval by the Board (or the Compensation Committee of the Board, if
applicable), you will be granted a stock option under the Company’s 2012 Equity
Incentive Plan (the “Plan”) to purchase 250,000 shares of the Company’s common
stock, with an exercise price per share equal to the closing price of the
Company’s common stock on the date of grant. The option will vest with respect
to 25% of the shares subject to the option on the one year anniversary of the
Effective Date and in equal monthly installments thereafter over the next three
years, subject to your continued service to the Company and the terms of the
Plan. In addition, you will also be granted 100,000 performance-based options
which will only vest upon achievement of specified Company performance goals.
The details of these options will be further outlined in the grant notice and
will also be subject to your continued service to the Company and the terms of
the Plan. The Board may grant additional stock, stock options, or other equity
awards to Executive in its sole discretion.

3.4 Changes to Compensation. It is anticipated that the Executive will be
considered on an annual basis for merit increases in base compensation
consistent with performance and market trends but subject to Board approval in
its sole discretion. Subject to Section 5.3 below, the Executive’s compensation
may be changed from time to time in the Company’s sole discretion based upon
Board approved changes to the Company’s operating plan after considering
relevant business conditions.

3.5 Employment Taxes. All of the Executive’s compensation and payments under
this Agreement shall be subject to customary withholding taxes and any other
employment taxes as are commonly required to be collected or withheld by the
Company.

3.6 Benefits. The Executive shall, in accordance with Company policy and the
terms of the applicable plan documents, be eligible to participate in benefits
under any executive benefit plan or arrangement which may be in effect from time
to time and made available to the Company’s executive or key management
employees.

3.7 Vacations and Holidays. In accordance with Company policies, Executive shall
be entitled to accrue three weeks of paid vacation during each calendar year,
subject to applicable maximum accrual caps; and Executive shall also be entitled
to certain paid holidays. The Company may modify any of its benefit plans or
policies, including its vacation and holiday policies, from time to time in its
sole discretion.

3.8 Expenses. The Company will reimburse Executive for reasonable travel,
entertainment or other expenses incurred by Executive in furtherance or in
connection with the performance of Executive’s duties hereunder, in accordance
with the Company’s expense reimbursement policy as in effect from time to time.
For the avoidance of doubt, to the extent that any reimbursements payable to
Executive are subject to the provisions of Section 409A of the Internal Revenue
Code of 1986, as amended (the “Code”): (a) to be eligible to obtain
reimbursement for such expenses Executive must submit expense reports within 45
days after the expense is incurred, (b) any such reimbursements will be paid no
later than December 31 of the year following the year in which the expense was
incurred, (c) the amount of expenses reimbursed in one year will not affect the
amount eligible for reimbursement in any subsequent year, and (d) the right to
reimbursement under this Agreement will not be subject to liquidation or
exchange for another benefit.

 

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  4. DEFINITIONS.

For purposes of this Agreement, the following terms shall have the following
meanings:

4.1 Cause. “Cause” for the Company to terminate Executive’s employment hereunder
means the occurrence of any of the following events: (i) Executive’s commission
of any felony or any crime involving fraud, dishonesty or moral turpitude under
the laws of the United States or any state thereof; (ii) Executive’s attempted
commission of, or participation in, a fraud or act of dishonesty against the
Company; (iii) Executive’s intentional, material violation of any contract or
agreement between the Participant and the Company (including this Agreement) or
of any statutory duty owed to the Company; (iv) Executive’s unauthorized use or
disclosure of the Company’s confidential information or trade secrets; or
(v) Executive’s gross misconduct.

4.2 Change in Control. For purposes of this Agreement, “Change in Control”
means: the occurrence of any one or more of the following events: (i) any person
(within the meaning of Section 13(d) or 14(d) of the Securities Exchange Act of
1934, as amended), other than Isis Pharmaceuticals, Inc. or Alnylam
Pharmaceuticals, becomes the owner, directly or indirectly, of securities of the
Company representing more than 50% of the combined voting power of the Company’s
then outstanding securities (other than in connection with a transaction
involving the issuance of securities by the Company the principal purpose of
which is to raise capital for the Company); (ii) there is consummated a merger,
consolidation or similar transaction to which the Company is a party and the
stockholders of the Company immediately prior thereto do not own outstanding
voting securities representing more than 50% of the combined outstanding voting
power of the surviving entity immediately following such merger, consolidation
or similar transaction or more than 50% of the combined outstanding voting power
of the parent of the surviving entity immediately following such merger,
consolidation or similar transaction; or (iii) there is consummated a sale,
lease exclusive license or other disposition of all or substantially all of the
consolidated assets of the Company and its subsidiaries, other than a sale,
lease or other disposition of all or substantially all of the consolidated
assets of the Company and its subsidiaries to an entity more than 50% of the
combined voting power of which is owned immediately following such disposition
by the stockholders of the Company immediately prior thereto.

4.3 Complete Disability. “Complete Disability” shall mean the inability of the
Executive to perform the Executive’s duties under this Agreement because the
Executive has become permanently disabled within the meaning of any policy of
disability income insurance covering employees of the Company then in force. In
the event the Company has no policy of disability income insurance covering
employees of the Company in force when the Executive becomes disabled, the term
Complete Disability shall mean the inability of the Executive to perform the
Executive’s duties under this Agreement by reason of any incapacity, physical or
mental, which the Board, based upon medical advice or an opinion provided by a
licensed physician acceptable to the Board, determines can be expected to result
in death or expected to last for a continuous period of more than 12 months.
Based upon such medical advice or

 

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opinion, the determination of the Board shall be final and binding and the date
such determination is made shall be the date of such Complete Disability for
purposes of this Agreement. The Company shall act upon this Section in
compliance with the Family Medical Leave Act (if applicable to the Company), the
Americans with Disabilities Act (as amended), and applicable state and local
laws.

4.4 Good Reason. “Good Reason” for the Executive to terminate the Executive’s
employment hereunder shall mean the occurrence of any of the following events
without the Executive’s consent; provided however, that any resignation by the
Executive due to any of the following conditions shall only be deemed for Good
Reason if: (i) the Executive gives the Company written notice of the intent to
terminate for Good Reason within 90 days following the first occurrence of the
condition(s) that the Executive believes constitutes Good Reason, which notice
shall describe such condition(s); (ii) the Company fails to remedy, if
remediable, such condition(s) within 30 days following receipt of the written
notice (the “Cure Period”) of such condition(s) from the Executive; and
(iii) Executive actually resigns his employment within the first 15 days after
expiration of the Cure Period:

4.4.1 a material breach of this Agreement by the Company;

4.4.2 a material reduction by the Company of the Executive’s Base Salary as
initially set forth herein or as the same may be increased from time to time;

4.4.3 a material reduction in the Executive’s authority, duties or
responsibilities; or

4.4.4 the Company relocates the facility that is the Executive’s principal place
of business with the Company to a location that requires an increase in the
Executive’s one-way driving distance by more than 35 miles.

 

  5. COMPENSATION UPON TERMINATION.

5.1 Death Or Complete Disability. If the Executive’s employment with the Company
is terminated as a result of Executive’s death or Complete Disability, the
Company shall pay to Executive, and/or Executive’s heirs, the Executive’s Base
Salary and accrued and unused vacation benefits earned through the date of
termination at the rate in effect at the time of termination, less standard
deductions and withholdings, and the Company shall thereafter have no further
obligations to the Executive and/or Executive’s heirs under this Agreement.

5.2 With Cause or Without Good Reason; Termination during first Six Months of
Employment. If the Executive’s employment with the Company is terminated (i) at
any time either by the Company for Cause or by the Executive without Good Reason
or (ii) prior to the six-month anniversary of the Effective Date, by the Company
without Cause or by the Executive with Good Reason, then in either case the
Company shall pay the Executive’s Base Salary and accrued and unused vacation
benefits earned through the date of termination at the rate in effect at the
time of termination, less standard deductions and withholdings, and the Company
shall thereafter have no further obligations to the Executive under this
Agreement.

 

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5.3 Without Cause or for Good Reason after Six Months of Employment. If on or
after the date that is six months following the Effective Date, the Executive’s
employment with the Company is terminated by the Company without Cause, or
Executive resigns for Good Reason, and in either case Executive signs a waiver
and release of claims (in substantially the form attached hereto as Exhibit A,
or in such other form of release as the Company may require (the “Release”)) on
or within the time period set forth therein, but in no event later than 45 days
after Executive’s termination date, and allows such Release to become effective
in accordance with its terms (such latest permitted date on which the Release
could become effective, the “Release Deadline”), then Executive will receive the
following benefits:

5.3.1 Severance Payment. A payment equal to the equivalent of 12 months of the
Executive’s Base Salary (the “Severance Payment”), less standard deductions and
withholdings, which shall be paid in a single lump sum within five days after
the effective date of the Release. For the avoidance of doubt, the Severance
Payment shall relate to the Base Salary at the rate in effect during the last
regularly scheduled payroll period immediately preceding the date of the
termination, and prior to any reduction in Base Salary that would permit the
Executive to voluntarily terminate employment for Good Reason.

5.3.2 Equity Acceleration. Contingent on the effective date of the Release, all
of the outstanding stock options, restricted stock or other equity awards that
Executive holds with respect to the Company’s common stock shall accelerate and
vest such that all shares shall be vested and fully exercisable as of the
effective date of Executive’s termination of employment. In order to give effect
to the foregoing provision, notwithstanding anything to the contrary set forth
in Executive’s equity award agreements, following any termination of Executive’s
employment that is without Cause or for Good Reason on or after the date that is
six months following the Effective Date, none of Executive’s equity awards shall
terminate with respect to any vested or unvested portion subject to such award
before the later of (A) the effective date of the Release, or (B) the Release
Deadline.

5.4 Additional Change in Control Related Severance Benefits. In the event that
on or after the date that is six months following the Effective Date,
Executive’s employment with the Company is terminated without Cause or Executive
resigns for Good Reason within the one month period immediately preceding or the
twelve month period immediately following the effective date of a Change in
Control, then subject to the Executive’s delivery to the Company of an effective
Release as required pursuant to Section 5.3, Executive shall be entitled to all
of the severance benefits described under Section 5.3 above, provided that:

5.4.1 The Executive shall additionally be entitled to a lump sum payment
equivalent to the Executive’s target Annual Bonus that was in effect at the time
of Executive’s termination (the “Bonus Payment”). The Bonus Payment shall be
subject to all standard deductions and withholdings and shall be paid in a
single lump sum within five days after the later of (A) the effective date of
the Release, or (B) the effective date of the Change in Control (if Executive’s
termination occurs prior to the Change in Control), but in no event later than
March 15 of the year following the year in which Executive’s termination of
employment occurred.

 

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5.5 Termination by Mutual Agreement of the Parties. The Executive’s employment
pursuant to this Agreement may be terminated at any time upon mutual agreement,
in writing, of the Parties. Any such termination of employment shall have the
consequences specified in such writing.

5.6 Survival of Certain Provisions. Sections 6 and 18 shall survive the
termination of this Agreement.

 

  6. CONFIDENTIAL AND PROPRIETARY INFORMATION; NONSOLICITATION.

6.1 As a condition of employment, Executive agrees to execute and abide by the
Employee Confidential Information and Inventions Agreement attached hereto as
EXHIBIT B.

6.2 While employed by the Company and for one year thereafter, the Executive
agrees that in order to protect the Company’s trade secrets and confidential and
proprietary information from unauthorized use, the Executive will not, either
directly or through others, solicit or attempt to solicit any employee,
consultant or independent contractor of the Company to terminate his or her
relationship with the Company in order to become an employee, consultant or
independent contractor to or for any other person or business entity.

 

  7. ASSIGNMENT AND BINDING EFFECT.

This Agreement shall be binding upon and inure to the benefit of the Executive
and the Executive’s heirs, executors, personal representatives, assigns,
administrators and legal representatives. Because of the unique and personal
nature of the Executive’s duties under this Agreement, neither this Agreement
nor any rights or obligations under this Agreement shall be assignable by the
Executive. This Agreement shall be binding upon and inure to the benefit of the
Company and its successors, assigns and legal representatives.

 

  8. CHOICE OF LAW.

This Agreement shall be construed and interpreted in accordance with the
internal laws of the State of California.

 

  9. INTEGRATION.

This Agreement, including Exhibit A and Exhibit B, contains the complete, final
and exclusive agreement of the Parties relating to the terms and conditions of
the Executive’s employment and the termination of the Executive’s employment,
and supersedes all prior and contemporaneous oral and written employment
agreements or arrangements between the Parties including the Prior Agreement
except as indicated herein.

 

  10. AMENDMENT.

Except as otherwise provided for in this Agreement, this Agreement cannot be
amended or modified except by a written agreement signed by the Executive and
the Company as directed by the Board.

 

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  11. WAIVER.

No term, covenant or condition of this Agreement or any breach thereof shall be
deemed waived, except with the written consent of the Party against whom the
wavier is claimed, and any waiver or any such term, covenant, condition or
breach shall not be deemed to be a waiver of any preceding or succeeding breach
of the same or any other term, covenant, condition or breach.

 

  12. SEVERABILITY.

The finding by a court of competent jurisdiction of the unenforceability,
invalidity or illegality of any provision of this Agreement shall not render any
other provision of this Agreement unenforceable, invalid or illegal. Such court
shall have the authority to modify or replace the invalid or unenforceable term
or provision with a valid and enforceable term or provision which most
accurately represents the Parties’ intention with respect to the invalid or
unenforceable term or provision.

 

  13. INTERPRETATION; CONSTRUCTION.

The headings set forth in this Agreement are for convenience of reference only
and shall not be used in interpreting this Agreement. This Agreement has been
drafted by legal counsel representing the Company, but the Executive has been
encouraged to consult with, and have consulted with, the Executive’s own
independent counsel and tax advisors with respect to the terms of this
Agreement. The Parties acknowledge that each Party and its counsel has reviewed
and revised, or had an opportunity to review and revise, this Agreement, and any
rule of construction to the effect that any ambiguities are to be resolved
against the drafting party shall not be employed in the interpretation of this
Agreement.

 

  14. REPRESENTATIONS AND WARRANTIES.

The Executive represents and warrants that the Executive is not restricted or
prohibited, contractually or otherwise, from entering into and performing each
of the terms and covenants contained in this Agreement, and that the Executive’s
execution and performance of this Agreement will not violate or breach any other
agreements between the Executive and any other person or entity.

 

  15. COUNTERPARTS; FACSIMILE.

This Agreement may be executed in two counterparts, each of which shall be
deemed an original, all of which together shall contribute one and the same
instrument. Facsimile signatures shall be treated the same as original
signatures.

 

  16. DISPUTE RESOLUTION.

To ensure the timely and economical resolution of disputes that may arise in
connection with Executive’s employment with the Company, Executive and the
Company agree that any and all disputes, claims, or causes of action arising
from or relating to the enforcement, breach, performance, negotiation,
execution, or interpretation of this Agreement, Executive’s

 

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employment, or the termination of Executive’s employment, including but not
limited to statutory claims, shall be resolved to the fullest extent permitted
by law by final, binding and confidential arbitration, by a single arbitrator,
in San Diego, California, conducted by JAMS, Inc. (“JAMS”) under the then
applicable JAMS rules (which can be found at the following web address:
http://www.jamsadr.com/rulesclauses). By agreeing to this arbitration procedure,
both Executive and the Company waive the right to resolve any such dispute
through a trial by jury or judge or administrative proceeding. The Company
acknowledges that Executive will have the right to be represented by legal
counsel at any arbitration proceeding. The arbitrator shall: (a) have the
authority to compel adequate discovery for the resolution of the dispute and to
award such relief as would otherwise be permitted by law; and (b) issue a
written arbitration decision, to include the arbitrator’s essential findings and
conclusions and a statement of the award. The arbitrator shall be authorized to
award any or all remedies that Executive or the Company would be entitled to
seek in a court of law. The Company shall pay all JAMS’ arbitration fees in
excess of the amount of court fees that would be required of the Executive if
the dispute were decided in a court of law. Nothing in this Agreement is
intended to prevent either Executive or the Company from obtaining injunctive
relief in court to prevent irreparable harm pending the conclusion of any such
arbitration. Any awards or orders in such arbitrations may be entered and
enforced as judgments in the federal and state courts of any competent
jurisdiction.

 

  17. TRADE SECRETS.

It is the understanding of both the Company and the Executive that the Executive
shall not divulge to the Company and/or its subsidiaries any confidential
information or trade secrets belonging to others, including the Executive’s
former employers, nor shall the Company and/or its Affiliates seek to elicit
from the Executive any such information. Consistent with the foregoing, the
Executive shall not provide to the Company and/or its Affiliates, and the
Company and/or its Affiliates shall not request, any documents or copies of
documents containing such information.

 

  18. ADVERTISING WAIVER.

The Executive agrees to permit the Company and/or its affiliates, subsidiaries,
or joint ventures currently existing or which shall be established during
Executive’s employment by the Company (collectively, “Affiliates”), and persons
or other organizations authorized by the Company and/or its Affiliates, to use,
publish and distribute advertising or sales promotional literature concerning
the products and/or services of the Company and/or its Affiliates, or the
machinery and equipment used in the provision thereof, in which the Executive’s
name and/or pictures of the Executive taken in the course of the Executive’s
provision of services to the Company and/or its Affiliates, appear. The
Executive hereby waives and releases any claim or right the Executive may
otherwise have arising out of such use, publication or distribution. The Company
agrees that, following termination of the Executive’s employment, it will not
create any new such literature containing the Executive’s name and/or pictures
without the Executive’s prior written consent.

 

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  19. APPLICATION OF SECTION 409A.

All benefits under this Agreement are intended to qualify for an exemption from
application of Section 409A of the Code and the regulations and other guidance
thereunder and any state law of similar effect (“Section 409A”) or to comply
with its requirements to the extent necessary to avoid adverse personal tax
consequences under Section 409A, and any ambiguities herein shall be interpreted
accordingly.

Notwithstanding anything to the contrary set forth herein, any severance
benefits that constitute “deferred compensation” within the meaning of
Section 409A shall not commence in connection with the Executive’s termination
of employment unless and until the Executive has also incurred a “separation
from service” (as such term is defined in Treasury Regulation
Section 1.409A-1(h)) (“Separation From Service”), unless the Company reasonably
determines that such amounts may be provided to the Executive without causing
the Executive to incur the additional 20% tax under Section 409A.

It is intended that each installment of the severance benefit payments provided
for in this Agreement is a separate “payment” for purposes of Treasury
Regulation Section 1.409A-2(b)(2)(i). For the avoidance of doubt, it is intended
that payments of the severance benefits set forth in this Agreement satisfy, to
the greatest extent possible, the exemptions from the application of
Section 409A provided under Treasury Regulation Sections 1.409A-1(b)(4),
1.409A-1(b)(5) and 1.409A-1(b)(9). However, if the Company (or, if applicable,
the successor entity thereto) determines that the severance benefits constitute
“deferred compensation” under Section 409A and the Executive is, on the
termination of service, a “specified employee” of the Company or any successor
entity thereto, as such term is defined in Section 409A(a)(2)(B)(i) of the Code,
then, solely to the extent necessary to avoid the incurrence of the adverse
personal tax consequences under Section 409A, the timing of the severance
benefit payments shall be delayed until the earlier to occur of: (i) the date
that is six months and one day after the Executive’s Separation From Service, or
(ii) the date of the Executive’s death. None of the severance benefits will be
paid or otherwise delivered prior to the effective date of the Release. If the
severance benefits are not covered by one or more exemptions from the
application of Section 409A and the Release could become effective in the
calendar year following the calendar year in which Executive’s Separation From
Service occurs, the Release will not be deemed effective any earlier than the
Release Deadline. Except to the minimum extent that payments must be delayed
because Executive is a “specified employee” or until the effectiveness of the
Release, all amounts will be paid as soon as practicable in accordance with the
Company’s normal payroll practices.

The severance benefits are intended to qualify for an exemption from application
of Section 409A or comply with its requirements to the extent necessary to avoid
adverse personal tax consequences under Section 409A, and any ambiguities herein
shall be interpreted accordingly.

 

  20. PARACHUTE PAYMENTS.

Except as otherwise provided in an agreement between the Executive and the
Company, if any payment or benefit the Executive would receive from the Company
or otherwise in connection with a Change in Control (“Payment”) would
(i) constitute a “parachute

 

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payment” within the meaning of Section 280G of the Code, and (ii) but for this
sentence, be subject to the excise tax imposed by Section 4999 of the Code (the
“Excise Tax”), then such Payment shall be equal to the Reduced Amount (as
defined herein). The “Reduced Amount” shall be either (x) the largest portion of
the Payment that would result in no portion of the Payment being subject to the
Excise Tax, or (y) the largest portion, up to and including the total, of the
Payment, whichever amount, after taking into account all applicable federal,
state and local employment taxes, income taxes, and the Excise Tax (all computed
at the highest applicable marginal rate), results in the Executive’s receipt, on
an after-tax basis, of the greater amount of the Payment notwithstanding that
all or some portion of the Payment may be subject to the Excise Tax. If a
reduction in payments or benefits constituting “parachute payments” is necessary
so that the Payment equals the Reduced Amount, reduction shall occur in the
manner that results in the greatest economic benefit to Executive.

The independent registered public accounting firm engaged by the Company for
general audit purposes as of the day prior to the effective date of the event
described in Section 280G(b)(2)(A)(i) of the Code shall perform the foregoing
calculations. If the independent registered public accounting firm so engaged by
the Company is serving as accountant or auditor for the individual, entity or
group effecting such event, the Company shall appoint a nationally recognized
independent registered public accounting firm to make the determinations
required hereunder. The Company shall bear all expenses with respect to the
determinations by such independent registered public accounting firm required to
be made hereunder. The independent registered public accounting firm engaged to
make the determinations hereunder shall provide its calculations, together with
detailed supporting documentation, to the Company and Executive within thirty
(30) calendar days after the date on which Executive’s right to a Payment is
triggered (if requested at that time by the Company or Executive) or such other
time as reasonably requested by the Company or Executive. Any good faith
determinations of the independent registered public accounting firm made
hereunder shall be final, binding and conclusive upon the Company and Executive.

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

 

REGULUS THERAPEUTICS INC. By:  

/s/ Kleanthis G. Xanthopoulos

Kleanthis G. Xanthopoulos, Ph.D. President and CEO

/s/ Paul C. Grint

PAUL C. GRINT, M.D.

[SIGNATURE PAGE TO EMPLOYMENT AGREEMENT]

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EXHIBIT A

RELEASE AND WAIVER OF CLAIMS

In consideration of the payments and other benefits set forth in Section 5 of
the Employment Agreement dated             , 2014, to which this form is
attached (the “Employment Agreement”), I,                     , hereby furnish
Regulus Therapeutics Inc. (the “Company”) with the following release and waiver
(“Release and Waiver”).

In exchange for the consideration provided to me by the Employment Agreement
that I am not otherwise entitled to receive, I hereby generally and completely
release the Company and its directors, officers, employees, shareholders,
partners, agents, attorneys, predecessors, successors, parent and subsidiary
entities, insurers, affiliates, and assigns (collectively, the “Released
Parties”) from any and all claims, liabilities and obligations, both known and
unknown, that arise out of or are in any way related to events, acts, conduct,
or omissions occurring prior to my signing this Release and Waiver
(collectively, the “Released Claims”). The Released Claims include, but are not
limited to: (1) all claims arising out of or in any way related to my employment
with the Company or the termination of that employment; (2) all claims related
to my compensation or benefits from the Company, including, but not limited to,
salary, bonuses, commissions, vacation pay, expense reimbursements, severance
pay, fringe benefits, stock, stock options, or any other ownership interests in
the Company; (3) all claims for breach of contract, wrongful termination, and
breach of the implied covenant of good faith and fair dealing; (4) all tort
claims, including, but not limited to, claims for fraud, defamation, emotional
distress, and discharge in violation of public policy; and (5) all federal,
state, and local statutory claims, including, but not limited to, claims for
discrimination, harassment, retaliation, attorneys’ fees, or other claims
arising under the federal Civil Rights Act of 1964 (as amended), the federal
Americans with Disabilities Act of 1990 (as amended), the federal Age
Discrimination in Employment Act of 1967 (as amended) (“ADEA”), the federal
Family and Medical Leave Act (as amended), the California Labor Code, and the
California Fair Employment and Housing Act (as amended). Notwithstanding the
foregoing, the following are not included in the Released Claims (the “Excluded
Claims”): (a) any rights or claims for indemnification I may have pursuant to
any written indemnification agreement with the Company to which I am a party,
the charter, bylaws, or operating agreements of the Company, or under applicable
law; (b) any rights or claims to unemployment compensation, funds accrued in my
401k account, or any vested equity incentives; (c) any rights that are not
waivable as a matter of law; or (d) any claims arising from the breach of this
Release and Waiver. I hereby represent and warrant that, other than the Excluded
Claims, I am not aware of any claims I have or might have against any of the
Released Parties that are not included in the Released Claims.

I also acknowledge that I have read and understand Section 1542 of the
California Civil Code which reads as follows: “A general release does not extend
to claims which the creditor does not know or suspect to exist in his or her
favor at the time of executing the release, which if known by him or her must
have materially affected his or her settlement with the debtor.” I hereby
expressly waive and relinquish all rights and benefits under that section and
any law of any jurisdiction of similar effect with respect to any claims I may
have against the Company.

I acknowledge that, among other rights, I am waiving and releasing any rights I
may have under ADEA, that this Release and Waiver is knowing and voluntary, and
that the consideration given for this Release and

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Waiver is in addition to anything of value to which I was already entitled as an
executive of the Company. If I am 40 years of age or older upon execution of
this Release and Waiver, I further acknowledge that I have been advised, as
required by the Older Workers Benefit Protection Act, that: (a) the release and
waiver granted herein does not relate to claims under the ADEA which may arise
after this Release and Waiver is executed; (b) I should consult with an attorney
prior to executing this Release and Waiver; (c) I have twenty-one (21) days in
which to consider this Release and Waiver (although I may choose voluntarily to
execute this Release and Waiver earlier); (d) I have seven (7) days following
the execution of this Release and Waiver to revoke my consent to this Release
and Waiver; and (e) this Release and Waiver shall not be effective until the
seven (7) day revocation period has expired without my having previously revoked
this Release and Waiver.

If I am less than 40 years of age upon execution of this Release and Waiver, I
acknowledge that I have the right to consult with an attorney prior to executing
this Release and Waiver (although I may choose voluntarily not to do so); and
that I have ten (10) days from the date of termination of my employment with the
Company in which to consider this Release and Waiver (although I may choose
voluntarily to execute this Release and Waiver earlier).

I acknowledge my continuing obligations under my Employee Confidentiality and
Inventions Assignment Agreement a copy of which is attached hereto (the “CIAA”).
Pursuant to the CIAA, I understand that among other things, I must not use or
disclose any confidential or proprietary information of the Company and I must
immediately return all Company property and documents (including all embodiments
of proprietary information) and all copies thereof in my possession or control.
I understand and agree that my right to the severance benefits I am receiving is
in exchange for my agreement to the terms of this Release and Waiver and is
contingent upon my continued compliance with my CIAA.

This Release and Waiver, including the CIAA, constitutes the complete, final and
exclusive embodiment of the entire agreement between the Company and me with
regard to the subject matter hereof. I am not relying on any promise or
representation by the Company that is not expressly stated herein. This Release
and Waiver may only be modified by a writing signed by both me and a duly
authorized officer of the Company.

 

Date:          By:   

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EXHIBIT B

EMPLOYEE CONFIDENTIAL INFORMATION AND INVENTIONS AGREEMENT