Exhibit 10.6
C.F.O. EMPLOYMENT AGREEMENT
February 11, 2003
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▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Dear ▇▇▇▇▇▇:
This letter shall serve to amend and restate the terms of employment
offered to you by Ribozyme Pharmaceuticals, Inc. (the "Company") and acknowledge
your acceptance of the employment on such terms as detailed below. This letter
is being entered into in connection with the proposed private venture capital
financing in the approximate amount of $45 million for the Company (the
"Financing"), and shall become effective upon the closing of the Financing and
the transactions contemplated thereby (the "Effective Time"). Until the
Effective Time, your current employment letter agreement dated May 29, 2001, as
amended on July 15, 2001 (collectively, the "Current Agreement") shall remain in
full force and effect.
Capitalized terms used herein and not otherwise defined herein shall
have the meanings ascribed to them on Appendix 1 hereto.
1. POSITIONS AND SCOPE OF EMPLOYMENT. Upon the Effective Time, you
shall continue to serve as Vice President of Operations 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, 2003, the Company
shall pay to you as compensation for your services a base salary at the
annualized rate of $266,000 (the "Base Salary"). Thereafter, your Base Salary
shall be subject to annual performance review by the President and Chief
Executive Officer for appropriate upward 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 Company
you shall be eligible to earn a bonus, including the 2003 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 Executive
Officer. The amount of the annual bonus which you shall be eligible to earn
shall be equal to twenty percent (20%) of your then current annual Base Salary
in the event you achieve such goals. 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 thirty (30) days after the end
of the calendar year with respect to which the bonus is payable.
(c) OPTIONS. On or before the date of signing of the Stock Purchase
Agreement in connection with the Financing, the Company shall grant to you stock
options to purchase such number of shares of the Company's common stock as shall
equal one and one-half percent (1 1/2%) of the Company's issued and outstanding
common stock immediately after the closing of the Financing, on a fully diluted,
fully converted basis, less 197,500 shares (which 197,500 shares have been
calculated based on the Company's current capitalization and before the proposed
reverse stock split, and will be considered a credit against the stock options
otherwise relating to one and one-half (1 1/2%) of the Company's issued and
outstanding common stock), which options shall be exercisable for a period of
ten (10) years at an exercise price equal to the greater of (i) the Fair Market
Value (as defined in the Company's stock option plan) on the date of the stock
option grant and (ii) $0.35 per share. Except as otherwise provided in Sections
4(d)(iii) and 5 below, the stock options shall vest during your employment with
the Company over a period of five (5) years beginning on the Effective Time, on
a monthly basis (so as to be fully vested at the end of a period of five (5)
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.
(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 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-existing conditions);
(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 such matching contributions shall vest over three
(3) years of service;
(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.
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.
(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.
(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 hereunder, in accordance with the
Company's expense reimbursement policy as in effect from time to time.
3. LOAN. The Company previously provided to you an interest-free loan
in the amount of $200,000 (the "Loan"). As of the date hereof, the Company has
forgiven twenty percent (20%) of the original principal amount of the Loan and
the balance of the Loan shall continue to be forgiven by the Company at the rate
of twenty percent (20%) of the original principal amount of the Loan each year
on the anniversary date in accordance with the original terms thereof until the
Loan has been fully forgiven on June 17, 2006, provided, however, that the Loan
shall be fully forgiven in the event of termination of your employment due to
your death or permanent disability (as hereinafter defined). In the event that
it shall be determined that any payment shall be due by you for taxes of any
kind or nature relating to the forgiveness of the Loan or the imputation of
interest in connection therewith ("Taxes"), the Company shall deliver to you an
additional payment in an amount such that, after payment of any taxes applicable
to such additional payment by the Company, the net amount available to you after
payment of all such taxes shall be equal to the Taxes payable by you, together
with any interest or penalties associated therewith (a "Gross-Up Payment").
4. 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, without notice, procedure or formality, with or without
Cause (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 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 to you immediately and all
further compensation by the Company to you hereunder shall terminate as of the
date of termination; (iii) the unforgiven balance of the Loan shall be repaid by
you within thirty (30) days of the date of termination; and (iv) 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 or your estate,
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; (iii)
the Company shall forgive all amounts owed by you or your estate, as applicable,
in connection with the Loan and make any necessary Gross-Up Payment; and (iv)
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 hereunder 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.
(d) TERMINATION WITHOUT CAUSE OR FOR GOOD REASON. 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 the Company'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 to you immediately; (iii)
subject to the provisions of Section 5 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 4(d)(v) below, but such
continuing vesting of your unvested options shall cease upon your obtaining new
comparable employment during the applicable severance period; (iv) the Company
shall forgive all amounts owed by you in connection with the Loan and make any
necessary Gross-Up Payment; (v) the Company shall pay to you a severance
payment, in monthly installments, equal to your Base Salary plus the lesser of
your full annual target bonus for the then current calendar year (which shall be
equal to 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 of
Control), 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 (vi) the Company shall be
responsible for all costs relating 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 obtaining comparable Health Care Coverage from a
future employer (after taking into account any waiting periods for such coverage
to become effective).
5. CHANGE OF CONTROL. Notwithstanding anything to the contrary
contained herein, in the event of a Change of Control of the Company, then (i)
all options 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
employment is 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 of Control, your employment with the Company is terminated by the
Company other than for Cause; (iii) the Company shall forgive all amounts owed
by you in connection with the Loan and make any necessary Gross-Up Payment; and
(iv) 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 Company
shall pay to you a severance payment in accordance with the provisions of
Section 4(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 qualify as 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 incentive stock options.
6. NON-DISCLOSURE/INVENTION ASSIGNMENT AGREEMENT;
NON-COMPETITION/NON-SOLICITATION AGREEMENT. You acknowledge that you previously
have entered into the Company's standard Non-Disclosure and Invention Assignment
Agreement upon commencing employment hereunder, in the forms of ATTACHMENT A and
ATTACHMENT B hereto. In addition, you agree to enter into the
Non-Competition/Non-Solicitation Agreement in the form of ATTACHMENT C hereto.
7. 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 such policy throughout the
duration of your employment.
8. 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.
9. INDEMNIFICATION. The Company agrees that if you are made a party or
are threatened to be made a party 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 or officer of the Company or any
subsidiary or affiliate 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 by Delaware 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 and disbursement, 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 your death
and (b) any successor of the Company. Any such 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 communications
provided 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 by registered 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:
RIBOZYME PHARMACEUTICALS, INC.
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▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Chairman of the Board
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 jurisdiction to 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 and Invention Assignment 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,
including without limitation the Change of Control Agreement, dated as of April
30, 2001, between you and the Company and, except as expressly provided in
Section 15 below, the Current Agreement. 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.
14. GOVERNING LAW. This Agreement shall be governed by and interpreted
in accordance with the laws of the State of Colorado, without reference to
principles of conflict of laws.
15. CONDITIONAL WAIVER OF CHANGE OF CONTROL. You agree to waive the
occurrence of a Change of Control under the Current Agreement, but only with
respect to the Financing, subject, however, to the condition that such waiver
shall not be considered to be a material modification of the Loan under the
▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 (the "Act"), which would prohibit a loan to an
officer or director of the Company after the effective date thereof. In the
event that such waiver would constitute a material modification of the Loan
under the Act, your waiver hereunder shall have no force or effect, and you will
be entitled to all of your rights relating to the Loan under the Current
Agreement and this Agreement with respect to the Change of Control by reason of
the Financing.
16. 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,
RIBOZYME PHARMACEUTICALS, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President and Chief Executive Officer
Agreed and accepted:
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
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Dated: February 11, 2003
Acknowledged and agreed:
OXFORD BIOSCIENCE PARTNERS IV L.P.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: General Partner
THE SPROUT GROUP
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Managing Director
VENROCK ASSOCIATES
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: As a General Partner or Member
Appendix 1
DEFINITIONS
CAUSE. "Cause" is defined as (i) conviction of a felony crime
involving moral turpitude, (ii) an intentional action or intentional failure 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)
willful and 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,
the Company 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 following receipt of such notice.
CHANGE OF CONTROL. "Change of 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 under said 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 or consolidation 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 thereto continuing 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 such surviving 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 or
substantially 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 a
transaction 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 or nomination for election was previously approved, cease for any
reason constitute a majority of the Board. For the avoidance of doubt, the
Financing in no event shall be deemed a Change of Control for the purposes of
this Agreement except as expressly provided in Section 15 of this Agreement.
GOOD REASON. "Good Reason" is defined as your voluntary resignation
from your employment with the Company upon the occurrence of any of the
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 adverse change 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 you immediately 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 of execution 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 Good Reason in the event
the Company takes any action which would adversely affect your participation in,
or adversely affect or reduce in any material aspect your benefits under, the
Company's medical, dental, short-term disability 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.
