EXHIBIT 10.28
August 19, 2004
Martin E. Schmieg
640 W. Carpenter Lane
Philadelphia, PA 19119
Dear Martin:
This letter shall serve to set forth
the terms of employment offered to you by Sirna Therapeutics, Inc.
(the “Company”) and acknowledge your acceptance of the
employment on such terms as detailed below. This letter (agreement)
shall become effective upon the mutually agreed upon start date of
your employment with the Company (the “Effective
Time”).
Capitalized terms used herein and
not otherwise defined herein shall have the meanings ascribed to
them on Attachment A hereto, which is incorporated
herein.
1. Positions and Scope of
Employment . Upon the Effective Time, you shall serve as Senior
Vice President and Chief Financial Officer of the Company. You
shall render such business and professional services in the
performance of your duties, consistent with your position within
the Company, consistent with the Bylaws of the Company and as shall
reasonably be assigned to you by the Company’s President and
Chief Executive Officer and/or the Board of Directors (the
“Board”), and you shall report directly to the
President and Chief Executive Officer. You shall perform your
duties faithfully and to the best of your ability and shall devote
your full business efforts and time to the Company.
2. Compensation .
(a) Base Salary; Annual
Reviews . During the period beginning as of the Effective Time
and ending on December 31, 2004, the Company shall pay to you as
compensation for your services a base salary at the annualized rate
of $250,000 (the “Base Salary”). Thereafter, your Base
Salary shall be subject to annual performance review by the
President and Chief Executive Officer. Your Base Salary shall be
paid in accordance with the Company’s normal payroll
practices.
(b) Bonus . In each calendar
year of your employment with the Company you shall be eligible to
earn a bonus. The annual bonus shall be based upon attainment of
goals which shall be mutually agreed upon by you and the President
and Chief Executive Officer. The amount of the annual bonus which
you shall be eligible to earn shall be equal to twenty five percent
(25%) of your then current annual Base Salary in the event: (a) you
achieve such goals, and (b) the Company achieves its corporate
goals. This amount shall be pro rated for the 2004 calendar year
based upon the portion thereof during which you were employed by
the Company. Your bonus shall be reasonably increased or decreased
based on the overachievement or underachievement of such goals.
Such bonus shall be payable in a cash lump sum within sixty (60)
days after the end of the calendar year with respect to which the
bonus is payable.
Sirna Employment Agreement-Martin
(c) Options . The Company
shall grant to you stock options to purchase 250,000 shares of the
Company’s common stock. The stock option grant shall be
governed by the terms of Company’s Stock Option Plan and the
exercise price for the stock option will be the NASDAQ market
closing price per share on the start date of employment with the
Company. Such options shall be exercisable for a period of ten (10)
years at an exercise price equal to the Fair Market Value (as
defined in the Company’s stock option plan) on the date of
the stock option grant. Twenty five percent (25%) of the stock
options granted herein shall vest on an annual basis during the
first year of your employment with the Company and the remaining
seventy five percent (75%) of the stock options shall vest
thereafter on a monthly basis over the subsequent (3) years so as
to be fully vested at the end of a period of four (4) years after
the Effective Time. Each stock option grant shall be in the form of
incentive stock options in the maximum amount permitted by
applicable law. You will also be considered for additional grants
of stock options in connection with each annual review by the
Board.
(d) Employee Benefits .
During your employment with the Company, you shall be entitled to
participate in the employee benefit plans currently and hereafter
maintained by the Company, which shall include, without limitation,
the following:
(i) group PPO medical and dental
insurance plans (the coverage under which shall include your
dependents and contain no restrictions relative to pre-existing
conditions and will be effective on the first day of the first
month after Effective Time);
(ii) short-term disability insurance
and long-term disability insurance (which coverage shall contain no
restrictions relative to pre-existing conditions);
(iii) term life insurance in the
guaranteed amount of $425,000 with the option of completing an
evidence of insurability for an additional $75,000, and with your
having the right to designate the beneficiary(ies)
thereof;
(iv) participation in the
Company’s 401(k) plan, your contributions to which may be
matched by the Company with contributions of shares of its common
stock if approved by the Board; provided that any such matching
contributions shall vest over three (3) years of service (you can
enroll on the first available date allowed under the plan following
the Effective Time);
(v) participation in the
Company’s Flexible Spending Account; and
(vi) participation in the
Company’s Stock Purchase Plan, allowing purchase of shares of
the Company’s common stock at fifteen percent (15%) below the
market price (you can enroll on the first available date allowed
under the Plan following the Effective Time).
The Company reserves the right to
revise, add or rescind any benefits at any time for its employees
generally; provided that any such permitted revision, addition or
rescission of benefits by the Company shall be without prejudice to
your rights provided in Section 4(d) hereof.
Sirna Employment Agreement-Martin
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(e) Vacation Days; Sick Days;
Holidays. You shall be entitled to paid vacation, sick days and
holidays in accordance with the Company’s policies as in
effect from time to time, as well as all applicable state and
federal laws.
(f) Expenses . The Company
shall reimburse you for reasonable travel, entertainment or other
expenses incurred by you in the furtherance of or in connection
with the performance of your duties on behalf of the Company and/or
for Company approved personal professional development in
accordance with the Company’s expense reimbursement policy as
in effect from time to time.
3. Termination .
(a) At-Will Employment . You
and the Company agree that your employment with the Company shall
be “at-will” employment, that you are free to resign
and, subject to the provisions hereof, the Company is free to
terminate your employment at any time for any reason or no
reason.
(b) Voluntary Termination;
Termination for Cause . In the event that your employment with
the Company is terminated voluntarily by you or for Cause by the
Company, then (i) all options which have vested shall continue to
be exercisable in accordance with the terms of the Company’s
stock option plan and applicable legal requirements; (ii) all
payments of Base Salary accrued but unpaid on the date of
termination, as well as all expenses incurred to the date of
termination, shall be due and payable to within the required
timeframe allowed by law and all further compensation by the
Company to you hereunder shall terminate as of the date of
termination; and (iii) you shall be entitled to continue medical
and dental insurance coverage for yourself and your dependents, at
your expense, at the same level of coverage as was provided to the
you under the Company’s insurance plan immediately prior to
the termination (“Health Care Coverage”) by electing
COBRA continuation coverage (“COBRA”) in accordance
with applicable law.
(c) Termination upon Death or
Disability . In the event that your employment with the Company
is terminated as a result of your death or permanent disability
then (i) all options which have vested shall continue to be
exercisable in accordance with the terms of the Company’s
stock option plan and applicable legal requirements; (ii) the
Company shall pay to you, your estate or your designated trust, as
applicable, all payments of Base Salary and bonuses accrued but
unpaid on the date of termination, as well as expenses incurred to
the date of termination, immediately upon the date of termination
and all further compensation by the Company to you hereunder shall
terminate as of the date of termination; and (iii) you shall be
entitled to continue medical and dental insurance coverage for
yourself and your dependents, at your expense, at the same level of
coverage as was provided to you under the Company’s Health
Care Coverage by electing COBRA in accordance with applicable law.
For purposes hereof, the term “permanent disability”
shall mean your inability to perform your duties as they exist at
the time disability commences on account of illness, accident or
other physical or mental incapacity which shall continue for a
consecutive period of ninety (90) days or an aggregate of one
hundred twenty (120) days in any consecutive twelve-month
period.
Sirna Employment Agreement-Martin
3
(d) Termination without Cause
. In the event that your employment with the Company is terminated
by the Company without Cause, 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
in accordance with Company’s policy, but unpaid on the date
of termination, as well as all expenses incurred to the date of
termination, shall be due and payable to you immediately; (iii)
subject to the provisions of Section 4 hereof, your unvested
options shall continue to vest, on a monthly basis, during the nine
(9) month severance period described in Section 3(d)(iv) below, but
such continuing vesting of your unvested options shall cease upon
your obtaining new employment during the applicable severance
period; (iv) the Company shall pay to you a severance payment, in
monthly installments, equal to your Base Salary for a period of
nine (9) months; provided, however, that in the event you are
terminated as a result of a Change of Control (other than for
Cause), the amount of such severance payment shall be twelve (12)
months’ severance; provided, further, that in the event you
obtain other employment during the applicable nine (9) or twelve
(12) month severance period, your severance payments thereafter
shall be reduced on a prospective basis (not to less than 0) in the
amount of cash compensation received by you during the remainder of
such applicable severance period; and (v) the Company shall be
responsible for all costs relating to maintaining your Health Care
Coverage for you and your dependents under COBRA during the
designated severance period. You shall be entitled to continue
medical and dental insurance coverage for yourself and your
dependents for the remaining period, at your expense in accordance
with applicable law. However, such Health Care Coverage shall
terminate upon your obtaining alternative Health Care Coverage
(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 if your employment is
terminated by the Company within one (1) year after the Change of
Control (other than for cause), then: (i) the greater of (a) fifty
percent (50%) of your unvested options shall vest immediately, or
(b) your unvested options shall continue to vest, on a monthly
basis, during the twelve (12) month severance period described in
Section 3(d)(iv) above; and (ii) the Company shall pay to you a
severance payment in accordance with the provisions of Section 3(d)
above.
5. Non-Disclosure and
Non-Competition Agreement and Invention Assignment Agreement .
You will enter into the Company’s standard Non-Disclosure and
Non-Competition Agreement and Invention Assignment Agreement upon
commencing employment hereunder, in the forms of Attachment
B and Attachment C hereto.
6. Directors’ and
Officers’ Liability Policy . You will be covered under
the Company’s directors’ and officers’ liability
insurance policy, which shall provide coverage in an amount and
upon terms customary to similarly situated companies. The Company
shall maintain a policy throughout the duration of your
employment.
7. Relocation Expenses associated
with this Agreement . Terms for reimbursement of expenses
associated with your relocation from Philadelphia, Pennsylvania to
Colorado, shall be in accordance with the terms set forth in
enclosed
Sirna Employment Agreement-Martin
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Attachment D. If employment is terminated
voluntarily or for cause within one (1) year of
payment/reimbursement by Company then 100% of relocation expenses
are to be promptly (but in no event later than 30 days following
the termination) repaid to Company.
8. Indemnification .
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