**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 youby 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 withthe Company (the “Effective Time”). 

 

Capitalizedterms 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 ofthe 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, consistentwith 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 ChiefExecutive 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 youas 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 appropriateupward 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 Companyyou 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 ExecutiveOfficer. 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 decreasedbased 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. 

(c) Options. The Company shall grant to you stock options to purchase 300,000 shares of theCompany’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 withthe 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 offour (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 byapplicable law. 

 

(d) Employee Benefits. During youremployment 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 whichshall 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-existingconditions); 

 

(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 suchmatching 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, allowingpurchase 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 anytime 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 paidvacation, 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 youin 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 inaccordance 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 freeto 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 Causeby 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 butunpaid 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 priorto 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 permanentdisability 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 yourdesignated 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 bythe 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 wasprovided 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 thetime 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-monthperiod. 

 

(d) Termination without Cause or for GoodReason. 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 theCompany’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 toyou 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, butsuch 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 BaseSalary 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 ofControl), 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 severancepayments 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 costsrelating 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 obtainingcomparable 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) alloptions 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 employmentis 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 ofControl, 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 Companyshall 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 qualifyas 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 incentivestock options. 

 

5. Non-Disclosure and Non-CompetitionAgreement 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 AttachmentB 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. Ifemployment 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 aparty 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 oraffiliate 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 byDelaware 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 anddisbursement, 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 yourdeath 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 communicationsprovided 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 byregistered 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 jurisdictionto 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 theNon-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 lawsof 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

Name:
 
Howard W. Robin

Title:
 
President & CEO

 

Agreed and accepted:

/s/ Roberto Guerciolini

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 intentionalfailure 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) willfuland 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, theCompany 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 followingreceipt of such notice. 

 

Change of Control. “Changeof 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 undersaid 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 orconsolidation 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 theretocontinuing 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 suchsurviving 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 orsubstantially 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 atransaction 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 ornomination 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 ofthe 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 adversechange 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 youimmediately 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 ofexecution 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 GoodReason 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-termdisability 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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