**Exhibit 10.2**

 

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|   | Sturlugata 8  IS-101 Reykjavik  ICELAND  Phone: +354 570 1900  Fax: +354 570 1981  E-mail: info@decode.is  Web Page: www.decode.com |
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|   | 18 August, 2003                                                                                                                     |

 

 

**J. Neal Armstrong**

**141 Needham Street**

**Newton, MA 02464**

 

Dear Neal,

 

We are delighted that you have agreed toserve as a member of the Board of Directors of deCODE genetics, Inc. (the“Company”).  This letter will confirmour understanding regarding your service. You have agreed to serve as a member of the Board of Directors of theCompany (the “Board”) and as the Chairman and financial expert of the AuditCommittee of the Board and will perform the duties of those positions inaccordance with the Company’s Amended and Restated Articles of Incorporationand Bylaws and all applicable laws and regulations.   We understand that you will dedicate such time as is necessaryor appropriate to the performance of these services.

 

In consideration of your services theCompany shall pay you (a) an annual retainer of $12,000 which shall be paid onthe Commencement Date  (as definedbelow) and on each anniversary of the Commencement Date (subject to pro rationin the final year of the term of this agreement if you resign from the Boardprior to an anniversary of the Commencement Date) and (b)  $3,000 per day for each Board or committeemeeting that you attend whether personally or by telephone participation andfor each other day on which you provides services to the Company at theCompany’s request.  The Company willalso reimburse you for first class travel and accommodations and incidentalexpenses you incur on behalf of or for the benefit of the Company, includingtravelling to and from Board and committee meetings, upon receipt of a requestfrom you supported by appropriate receipts and other relevant documentation.

 

In addition, on the Commencement Date theCompany will grant you a non-qualified stock option under its 2002 EquityIncentive Plan to purchase up to 60,000 shares of the Company’s common stock ata price equal to the closing price of the stock as reported on the NasdaqNational Market on the day prior to the Commencement Date on the terms andconditions contained in the stock option grant agreement attached as an exhibitto this letter.

 

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Theagreement contained in this letter shall become effective upon your election asa member of the Board (the “Commencement Date”) and shall continue until theclose of business on the third anniversary of the date of this Agreement orsuch earlier date, if any, that you resign from the Board and thereafter untilterminated by either party upon 90 days’ written notice to each other.

 

If the terms set forth in this letter aresatisfactory to you, please indicate by signing the enclosed copy of thisletter and returning it to me.

 

 
|                  |   | Very truly yours,                    |
|-----------------------|--------|--------------------------------------|
|                  |   |                                 |
|                  |   | /s/  Kári  Stefánsson |   |
|                  |   | Kári Stefánsson            |
|                  |   | Chairman of the Board of Directors   |
|                  |   |                                 |
|                  |   |                                 |
| Agreed:               |   |                                 |
|                  |
|                  |
| /s/ J. Neal Armstrong |   |
| J. Neal Armstrong     |   |
|                       |        |                                      |  |  |

 

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