ALNYLAM PHARMACEUTICALS,
INC.
AMENDED AND RESTATED 2004 STOCK
INCENTIVE PLAN
The purpose of
this Amended and Restated 2004 Stock Incentive Plan (the
“Plan”) of Alnylam Pharmaceuticals, Inc., a Delaware
corporation (the “Company”), is to advance the
interests of the Company’s stockholders by enhancing the
Company’s ability to attract, retain and motivate persons who
make (or are expected to make) important contributions to the
Company by providing such persons with equity ownership
opportunities and performance-based incentives and thereby better
aligning the interests of such persons with those of the
Company’s stockholders. Except where the context otherwise
requires, the term “Company” shall include any of the
Company’s present or future parent or subsidiary corporations
as defined in Sections 424(e) or (f) of the Internal Revenue
Code of 1986, as amended, and any regulations promulgated
thereunder (the “Code”) and any other business venture
(including, without limitation, joint venture or limited liability
company) in which the Company has a controlling interest, as
determined by the Board of Directors of the Company (the
“Board”).
All of the
Company’s employees, officers, directors, consultants and
advisors (including persons who have entered into an agreement with
the Company under which they will be employed by the Company in the
future) are eligible to participate in the Plan. Options and
restricted stock awards (each, an “Award”) were granted
under the Plan prior to the Amendment Date (as hereinafter
defined). As of the Amendment Date, only options may be granted
under the Plan. Notwithstanding the foregoing, the terms and
conditions of any restricted stock awards outstanding on the
Amendment Date will continue to be governed by the Plan. Each
person who has been granted an Award under the Plan shall be deemed
a “Participant”. The Amendment Date shall be
June 11, 2009.
3.
Administration and Delegation
(a)
Administration by Board of Directors . The Plan will be
administered by the Board. The Board shall have authority to grant
Options (as hereinafter defined) and to adopt, amend and repeal
such administrative rules, guidelines and practices relating to the
Plan as it shall deem advisable. The Board may construe and
interpret the terms of the Plan and any Award agreements entered
into under the Plan. The Board may correct any defect, supply any
omission or reconcile any inconsistency in the Plan or any Award in
the manner and to the extent it shall deem expedient to carry the
Plan into effect and it shall be the sole and final judge of such
expediency. All decisions by the Board shall be made in the
Board’s sole discretion and shall be final and binding on all
persons having or claiming any interest in the Plan or in any
Award.
(b) Appointment
of Committees . To the extent permitted by applicable law, the
Board may delegate any or all of its powers under the Plan to one
or more committees or subcommittees of the Board (a
“Committee”). All references in the Plan to the
“Board” shall mean the Board or a Committee of the
Board or the officers referred to in Section 3(c) to the
extent that the
Board’s powers or authority under the Plan have been
delegated to such Committee or officers.
(c)
Delegation to Officers . To the extent permitted by
applicable law, the Board may delegate to one or more officers of
the Company the power to grant Options to employees or officers of
the Company or any of its present or future subsidiary corporations
and to exercise such other powers under the Plan as the Board may
determine, provided that the Board shall fix the terms of the
Options to be granted by such officers (including the exercise
price of such Options, which may include a formula by which the
exercise price will be determined) and the maximum number of shares
subject to Options that the officers may grant; provided further,
however, that no officer shall be authorized to grant Options to
any “executive officer” of the Company (as defined by
Rule 3b-7 under the Securities Exchange Act of 1934, as
amended (the “Exchange Act”)) or to any
“officer” of the Company (as defined by Rule 16a-1
under the Exchange Act).
(d)
Options to Non-Employee Directors . Discretionary Options to
non-employee directors will only be granted and administered by a
Committee, all of the members of which are independent as defined
by Section 4200(a)(15) of the Nasdaq Marketplace
Rules.
4. Stock
Available for Awards
(a)
Number of Shares . Subject to adjustment under
Section 8, Options may be granted under the Plan for up to the
number of shares of common stock, $0.01 par value per share, of the
Company (the “Common Stock”) that is equal to the sum
of:
(1) 9,915,170
shares of Common Stock; plus
(2) such
additional number of shares of Common Stock (up to 2,451,315
shares) as is equal to the sum of (x) the number of shares of
Common Stock reserved for issuance under the Company’s 2002
and 2003 Employee, Director and Consultant Stock Plans (the
“Existing Plans”) that remain available for grant under
the Existing Plans immediately prior to the closing of the
Company’s initial public offering and (y) the number of
shares of Common Stock subject to awards granted under the Existing
Plans which awards expire, terminate or are otherwise surrendered,
canceled, forfeited or repurchased by the Company at their original
issuance price pursuant to a contractual repurchase right (subject,
however, in the case of Incentive Stock Options (as hereinafter
defined) to any limitations of the Code).
(b) Share
Counting . For purposes of counting the number of shares
available for the grant of Options under the Plan and under the
sublimit contained in Section 4(c)(2), if any Award expires or
is terminated, surrendered or canceled without having been fully
exercised or is forfeited in whole or in part (including as the
result of shares of Common Stock subject to such Award being
repurchased by the Company at the original issuance price pursuant
to a contractual repurchase right) or results in any Common Stock
not being issued, the unused Common Stock covered by such Award
shall again be available for the grant of Options under the Plan;
provided, however , in the case of Incentive Stock Options
(as hereinafter defined), the foregoing shall be subject to any
limitations under the Code. Shares of Common Stock delivered (by
actual delivery, attestation, or net exercise) to the Company by a
Participant to (A) purchase shares of
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Common Stock
upon the exercise of an Award or (B) satisfy tax withholding
obligations (including shares retained from the Award creating the
tax obligation) shall not be added back to the number of shares
available for the future grant of Options. Shares of Common Stock
repurchased by the Company on the open market using the proceeds
from the exercise of an Award shall not increase the number of
shares available for future grant of Options. Shares issued under
the Plan may consist in whole or in part of authorized but unissued
shares or treasury shares.
(c)
Sub-limits . Subject to adjustment under Section 8, the
following sub-limits on the number of shares subject to Options
shall apply:
(1)
Section 162(m) Per-Participant Limit . Subject to
adjustment under Section 8, the maximum number of shares of
Common Stock with respect to which Options may be granted to any
Participant under the Plan shall be 500,000 per calendar year,
except in the calendar year in which the Participant is hired by
the Company, in which case the maximum number of shares shall be
1,000,000. The per Participant limit described in this
Section 4(c)(1) shall be construed and applied consistently
with Section 162(m) of the Code or any successor provision thereto,
and the regulations thereunder
(“Section 162(m)”).
(2)
Limit on Awards to Non-Employee Directors . Following the
Amendment Date, the maximum number of shares with respect to which
Options may be granted to directors who are not employees of the
Company at the time of grant shall be 5% of the maximum number of
authorized shares set forth in Section 4(a).
(a)
General . The Board may grant options to purchase Common
Stock (each, an “Option”) and determine the number of
shares of Common Stock to be covered by each Option, the exercise
price of each Option and the conditions and limitations applicable
to the exercise of each Option, including conditions relating to
applicable federal or state securities laws, as it considers
necessary or advisable. An Option that is not intended to be an
Incentive Stock Option (as hereinafter defined) shall be designated
a “Nonstatutory Stock Option”.
(b)
Incentive Stock Options . An Option that the Board intends
to be an “incentive stock option” as defined in
Section 422 of the Code (an “Incentive Stock
Option”) shall only be granted to employees of Alnylam
Pharmaceuticals, Inc., any of Alnylam Pharmaceuticals, Inc.’s
present or future parent or subsidiary corporations as defined in
Sections 424(e) or (f) of the Code, and any other entities the
employees of which are eligible to receive Incentive Stock Options
under the Code, and shall be subject to and shall be construed
consistently with the requirements of Section 422 of the Code.
The Company shall have no liability to a Participant, or any other
party, if an Option (or any part thereof) that is intended to be an
Incentive Stock Option is not an Incentive Stock Option or if the
Company converts an Incentive Stock Option to a Nonstatutory Stock
Option.
(c)
Exercise Price . The Board shall establish the exercise
price of each Option and specify the exercise price in the
applicable option agreement. The exercise price shall be not less
than 100% of the Fair Market Value (as hereinafter defined) on the
date the Option is granted;
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provided,
however , that if the
Board approves the grant of an Option with an exercise price to be
determined on a future date, the exercise price shall be not less
than 100% of the Fair Market Value on such future date. “Fair
Market Value” of a share of Common Stock for purposes of the
Plan will be determined as follows:
(1) if
the Common Stock trades on a national securities exchange, the
closing sale price (for the primary trading session) on the date of
grant;
(2) if
the Common Stock does not trade on any such exchange, the average
of the closing bid and asked prices as reported by an authorized
OTCBB market data vendor as listed on the OTCBB website (otcbb.com)
on the date of grant; or
(3) if
the Common Stock is not publicly traded, the Board will determine
the Fair Market Value for purposes of the Plan using any measure of
value it determines to be appropriate (including, as it considers
appropriate, relying on appraisals) in a manner consistent with the
valuation principles under Section 409A of the Code, except as
the Board or Committee may expressly determine
otherwise.
For any date
that is not a trading day, the Fair Market Value of a share of
Common Stock for such date will be determined by using the closing
sale price or average of the bid and asked prices, as appropriate,
for the immediately preceding trading day and with the timing in
the formulas above adjusted accordingly. The Board can substitute a
particular time of day or other measure of “closing sale
price” or “bid and asked prices” if appropriate
because of exchange or market procedures or can, in its sole
discretion, use weighted averages either on a daily basis or such
longer period as complies with Section 409A of the Code. The
Board has sole discretion to determine the Fair Market Value for
purposes of this Plan, and all Options are conditioned on the
participants’ agreement that the Board’s determination
is conclusive and binding even though others might make a different
determination.
(d)
Duration of Options . Each Option shall be exercisable at
such times and subject to such terms and conditions as the Board
may specify in the applicable option agreement; provided, however,
that no Option will be granted for a term in excess of
10 years.
(e)
Exercise of Option . Options may be exercised by delivery to
the Company of a written notice of exercise signed by the proper
person or by any other form of notice (including electronic notice)
approved by the Company, together with payment in full as specified
in Section 5(f) for the number of shares for which the Option is
exercised. Shares of Common Stock subject to the Option will be
delivered by the Company as soon as practicable following
exercise.
(f)
Payment Upon Exercise. Common Stock purchased upon the
exercise of an Option granted under the Plan shall be paid for as
follows:
(1) in
cash or by check, payable to the order of the Company;
(2) except
as may otherwise be provided in the applicable option agreement, by
(i) delivery of an irrevocable and unconditional undertaking
by a creditworthy broker to deliver promptly to the Company
sufficient funds to pay the exercise price and any required
tax
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withholding or
(ii) delivery by the Participant to the Company of a copy of
irrevocable and unconditional instructions to a creditworthy broker
to pay promptly to the Company the exercise price and any required
tax withholding;
(3) to
the extent provided for in the applicable option agreement or
approved by the Company in its sole discretion, by delivery of
shares of Common Stock owned by the Participant valued at their
Fair Market Value, provided (i) such method of payment is then
permitted under applicable law, (ii) such Common Stock, if
acquired directly from the Company, was owned by the Participant at
least six months prior to such delivery and (iii) such Common
Stock is not subject to any repurchase, forfeiture, unfulfilled
vesting or other similar requirements;
(4) to
the extent provided for in the applicable Nonstatutory Stock Option
agreement or approved by the Board in its sole discretion, by
delivery of a notice of “net exercise” to the Company,
as a result of which the Participant would receive the number of
shares of Common Stock underlying the Option so exercised reduced
by the number of shares of Common Stock equal to the aggregate
exercise price of the Option divided by the Fair Market Value on
the date of exercise;
(5) to
the extent permitted by applicable law and provided for in the
applicable Option agreement or approved by the Board, in its sole
discretion, by payment of such other lawful consideration as the
Board may determine; or
(6) by
any combination of the above permitted forms of payment.
(g)
Limitation on Repricing . Unless such action is approved by
the Company’s stockholders: (1) no outstanding Option
granted under the Plan may be amended to provide an exercise price
per share that is lower than the then-current exercise price per
share of such outstanding Option (other than adjustments pursuant
to Section 8) and (2) the Board may not cancel any
outstanding option (whether or not granted under the Plan) and
grant in substitution therefor new Awards under the Plan covering
the same or a different number of shares of Common Stock and having
an exercise price per share lower than the then-current exercise
price per share of the cancelled option.
The provisions of
this Section 6 shall apply to option awards granted prior to
the Amendment Date. No Options shall be granted pursuant to this
Section 6 following the Amendment Date.
(a)
Initial Grant to New Directors . Upon the commencement of
service on the Board by any individual who is not then an employee
of the Company or any subsidiary of the Company, the Company shall
grant to such person a Nonstatutory Stock Option to purchase 30,000
shares of Common Stock (subject to adjustment under
Section 8).
(b) Annual
Grant . On the date of each annual meeting of stockholders of
the Company, beginning with the annual meeting in 2005, the Company
shall grant a Nonstatutory Stock Option to purchase 15,000 shares
of Common Stock (subject to adjustment under
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Section 8)
to each member of the Board of Directors of the Company
(1) who is both serving as a director of the Company
immediately prior to and immediately following such annual meeting,
(2) who is not then an employee of the Company or any of its
subsidiaries; and (3) who has served as a director of the
Company for at least six months. In
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