2003 Emp, Director & Consultant Stock Plan

EXHIBIT 10.2


ALNYLAM HOLDING CO.


2003 EMPLOYEE, DIRECTOR AND CONSULTANT STOCK PLAN, AS AMENDED


1. DEFINITIONS.


Unless otherwise specified or unless the context otherwise requires,
the following terms, as used in this Alnylam Holding Co. 2003 Employee,
Director and Consultant Stock Plan, have the following meanings:


Administrator means the Board of Directors, unless it has
delegated power to act on its behalf to the Committee, in
which case the Administrator means the Committee.


Affiliate means a corporation which, for purposes of Section
424 of the Code, is a parent or subsidiary of the Company,
direct or indirect.


Board of Directors means the Board of Directors of the
Company.


Change of Control means a merger or consolidation of the
Company whether or not approved by the Board of Directors,
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 or the parent of such corporation) at
least 50% of the total voting power represented by the voting
securities of the Company or such surviving entity or parent
of such corporation outstanding immediately after such merger
or consolidation, or the stockholders of the Company approve
an agreement for the sale or disposition by the Company of all
or substantially all of the Company's assets.


Code means the United States Internal Revenue Code of 1986, as
amended.


Committee means the committee of the Board of Directors to
which the Board of Directors has delegated power to act under
or pursuant to the provisions of the Plan.


Common Stock means shares of the Company's common stock,
$.0001 par value per share.


Company means Alnylam Holding Co., a Delaware corporation.


Disability or Disabled means permanent and total disability as
defined in Section 22(e)(3) of the Code.


Employee means any employee of the Company or of an Affiliate
(including, without limitation, an employee who is also
serving as an officer or director of the Company or of an
Affiliate), designated by the Administrator to be eligible to
be granted one or more Stock Rights under the Plan.


Fair Market Value of a Share of Common Stock means:


(1) If the Common Stock is listed on a national securities
exchange or traded in the over-the-counter market and sales
prices are regularly reported for the Common Stock, the
closing or last price of the Common Stock on the Composite
Tape or other comparable reporting system for the trading day
immediately preceding the applicable date;


(2) If the Common Stock is not traded on a national securities
exchange but is traded on the over-the-counter market, if
sales prices are not regularly reported for the Common Stock
for the trading day referred to in clause (1), and if bid and
asked prices for the Common Stock are regularly reported, the
mean between the bid and the asked price for the Common Stock
at the close of trading in the over-the-counter market for the
trading day on which Common Stock was traded immediately
preceding the applicable date; and


(3) If the Common Stock is neither listed on a national
securities exchange nor traded in the over-the-counter market,
such value as the Administrator, in good faith, shall
determine.


ISO means an option meant to qualify as an incentive stock
option under Section 422 of the Code.


Non-Qualified Option means an option which is not intended to
qualify as an ISO.


Option means an ISO or Non-Qualified Option granted under the
Plan.


Option Agreement means an agreement between the Company and a
Participant delivered pursuant to the Plan, in such form as
the Administrator shall approve.


Participant means an Employee, director or consultant of the
Company or an Affiliate to whom one or more Stock Rights are
granted under the Plan. As used herein, "Participant" shall
include "Participant's Survivors" where the context requires.


Plan means this Alnylam Holding Co. 2003 Employee, Director
and Consultant Stock Plan.


Shares means shares of the Common Stock as to which Stock
Rights have been or may be granted under the Plan or any
shares of capital stock into which the Shares are changed or
for which they are exchanged within the provisions of
Paragraph 3


of the Plan. The Shares issued under the Plan may be
authorized and unissued shares or shares held by the Company
in its treasury, or both.


Stock Grant means a grant by the Company of Shares under the
Plan.


Stock Grant Agreement means an agreement between the Company
and a Participant delivered pursuant to the Plan, in such form
as the Administrator shall approve.


Stock Right means a right to Shares of the Company granted
pursuant to the Plan -- an ISO, a Non-Qualified Option or a
Stock Grant.


Survivor means a deceased Participant's legal representatives
and/or any person or persons who acquired the Participant's
rights to a Stock Right by will or by the laws of descent and
distribution.


2. PURPOSES OF THE PLAN.


The Plan is intended to encourage ownership of Shares by Employees and directors of and certain consultants to the Company in order to attract such people, to induce them to work for the benefit of the Company or of an Affiliate and to provide additional incentive for them to promote the success of the Company or of an Affiliate. The Plan provides for the granting of ISOs, Non-Qualified Options and Stock Grants.


3. SHARES SUBJECT TO THE PLAN.


(a) The number of Shares which may be issued from time to time pursuant to this Plan shall be (i) 944,812, plus (ii) such additional Shares as are represented by options and other awards granted under the Company's 2002 Employee, Director and Consultant Stock Plan which are cancelled or expire without delivery of shares of stock by the Company; provided, however, that the number of Shares which may be issued from time to time pursuant to clause (ii) shall not exceed 1,506,503, or the equivalent of such number of Shares after the Administrator, in its sole discretion, has interpreted the effect of any stock split, stock dividend, combination, recapitalization or similar transaction in accordance with Paragraph 23 of the Plan.


If an Option ceases to be "outstanding", in whole or in part, or if the Company shall reacquire any Shares issued pursuant to a Stock Grant, the Shares which were subject to such Option and any Shares so reacquired by the Company shall be available for the granting of other Stock Rights under the Plan. Any Option shall be treated as "outstanding" until such Option is exercised in full, or terminates or expires under the provisions of the Plan, or by agreement of the parties to the pertinent Option Agreement.


4. ADMINISTRATION OF THE PLAN.


The Administrator of the Plan will be the Board of Directors, except to the extent the Board of Directors delegates its authority to the Committee, in which case the Committee shall be the Administrator. Subject to the provisions of the Plan, the Administrator is authorized to:


a. Interpret the provisions of the Plan or of any Option or Stock
Grant and to make all rules and determinations which it deems
necessary or advisable for the administration of the Plan;


b. Determine which Employees, directors and consultants shall be
granted Stock Rights;


c. Determine the number of Shares for which a Stock Right or
Stock Rights shall be granted;


d. Specify the terms and conditions upon which a Stock Right or
Stock Rights may be granted; and


e. Adopt any sub-plans applicable to residents of any specified
jurisdiction as it deems necessary or appropriate in order to
comply with or take advantage of any tax laws applicable to
the Company or to Plan Participants or to otherwise facilitate
the administration of the Plan, which sub-plans may include
additional restrictions or conditions applicable to Options or
Shares acquired upon exercise of Options.


provided, however, that all such interpretations, rules, determinations, terms and conditions shall be made and prescribed in the context of preserving the tax status under Section 422 of the Code of those Options which are designated as ISOs. Subject to the foregoing, the interpretation and construction by the Administrator of any provisions of the Plan or of any Stock Right granted under it shall be final, unless otherwise determined by the Board of Directors, if the Administrator is the Committee. In addition, if the Administrator is the Committee, the Board of Directors may take any action under the Plan that would otherwise be the responsibility of the Committee.


If permissible under applicable law, the Board of Directors or the Committee may allocate all or any portion of its responsibilities and powers to any one or more of its members and may delegate all or any portion of its responsibilities and powers to any other person selected by it. Any such allocation or delegation may be revoked by the Board of Directors or the Committee at any time.


5. ELIGIBILITY FOR PARTICIPATION.


The Administrator will, in its sole discretion, name the Participants in the Plan, provided, however, that each Participant must be an Employee, director or consultant of the Company or of an Affiliate at the time a Stock Right is granted. Notwithstanding the foregoing, the Administrator may authorize the grant of a Stock Right to a person not then an Employee, director or consultant of the Company or of an Affiliate; provided, however, that the actual grant of such Stock Right shall be conditioned upon such person becoming eligible to become a Participant at or prior to the time of the execution of the Agreement evidencing such Stock Right. ISOs may be granted only to Employees. Non-Qualified Options and Stock Grants may


be granted to any Employee, director or consultant of the Company or an Affiliate. The granting of any Stock Right to any individual shall neither entitle that individual to, nor disqualify him or her from, participation in any other grant of Stock Rights.


6. TERMS AND CONDITIONS OF OPTIONS.


Each Option shall be set forth in writing in an Option Agreement, duly executed by the Company and, to the extent required by law or requested by the Company, by the Participant. The Administrator may provide that Options be granted subject to such terms and conditions, consistent with the terms and conditions specifically required under this Plan, as the Administrator may deem appropriate including, without limitation, subsequent approval by the shareholders of the Company of this Plan or any amendments thereto. The Option Agreements shall be subject to at least the following terms and conditions:


A. Non-Qualified Options: Each Option intended to be a
Non-Qualified Option shall be subject to the terms and
conditions which the Administrator determines to be
appropriate and in the best interest of the Company, subject
to the following minimum standards for any such Non-Qualified
Option:


a. Option Price: Each Option Agreement shall state the
option price (per share) of the Shares covered by
each Option, which option price shall be determined
by the Administrator but shall not be less than the
par value per share of Common Stock.


b. Each Option Agreement shall state the number of
Shares to which it pertains;


c. Each Option Agreement shall state the date or dates
on which it first is exercisable and the date after
which it may no longer be exercised, and may provide
that the Option rights accrue or become exercisable
in installments over a period of months or years, or
upon the occurrence of certain conditions or the
attainment of stated goals or events; and


d. Exercise of any Option may be conditioned upon the
Participant's execution of a Share purchase agreement
in form satisfactory to the Administrator providing
for certain protections for the Company and its other
shareholders, including requirements that:


i. The Participant's or the Participant's
Survivors' right to sell or transfer the
Shares may be restricted; and


ii. The Participant or the Participant's
Survivors may be required to execute letters
of investment intent and must also
acknowledge that the Shares will bear
legends noting any applicable restrictions.


B. ISOs: Each Option intended to be an ISO shall be issued only
to an Employee and be subject to the following terms and
conditions, with such additional restrictions or changes as
the Administrator determines are appropriate but not in
conflict with Section 422 of the Code and relevant regulations
and rulings of the Internal Revenue Service:


a. Minimum standards: The ISO shall meet the minimum
standards required of Non-Qualified Options, as
described in Paragraph 6(A) above, except clause (a)
thereunder.


b. Option Price: Immediately before the ISO is granted,
if the Participant owns, directly or by reason of the
applicable attribution rules in Section 424(d) of the
Code:


i. 10% or less of the total combined voting
power of all classes of stock of the Company
or an Affiliate, the Option price per share
of the Shares covered by each ISO shall not
be less than 100% of the Fair Market Value
per share of the Shares on the date of the
grant of the Option; or


ii. More than 10% of the total combined voting
power of all classes of stock of the Company
or an Affiliate, the Option price per share
of the Shares covered by each ISO shall not
be less than 110% of the said Fair Market
Value on the date of grant.


c. Term of Option: For Participants who own:


i. 10% or less of the total combined voting
power of all classes of stock of the Company
or an Affiliate, each ISO shall terminate
not more than ten years from the date of the
grant or at such earlier time as the Option
Agreement may provide; or


ii. More than 10% of the total combined voting
power of all classes of stock of the Company
or an Affiliate, each ISO shall terminate
not more than five years from the date of
the grant or at such earlier time as the
Option Agreement may provide.


d. Limitation on Yearly Exercise: The Option Agreements
shall restrict the amount of ISOs which may become
exercisable in any calendar year (under this or any
other ISO plan of the Company or an Affiliate) so
that the aggregate Fair Market Value (determined at
the time each ISO is granted) of the stock with
respect to which ISOs are exercisable for the first
time by the Participant in any calendar year does not
exceed $100,000.


7. TERMS AND CONDITIONS OF STOCK GRANTS.


Each offer of a Stock Grant to a Participant shall state the date prior to which the Stock Grant must be accepted by the Participant, and the principal terms of each Stock Grant shall be set forth in a Stock Grant Agreement, duly executed by the Company and, to the extent required by law or requested by the Company, by the Participant. The Stock Grant Agreement shall be in a form approved by the Administrator and shall contain terms and conditions which the Administrator determines to be appropriate and in the best interest of the Company, subject to the following minimum standards:


(a) Each Stock Grant Agreement shall state the purchase price (per
share), if any, of the Shares covered by each Stock Grant,
which purchase price shall be determined by the Administrator
but shall not be less than the minimum consideration required
by the Delaware General Corporation Law on the date of the
grant of the Stock Grant;


(b) Each Stock Grant Agreement shall state the number of Shares to
which the Stock Grant pertains; and


(c) Each Stock Grant Agreement shall include the terms of any
right of the Company to restrict or reacquire the Shares
subject to the Stock Grant, including the time and events upon
which such reacquisition rights shall accrue and the purchase
price therefor, if any.


8. EXERCISE OF OPTIONS AND ISSUE OF SHARES.


An Option (or any part or installment thereof) shall be exercised by giving written notice to the Company or its designee, together with provision for payment of the full purchase price in accordance with this Paragraph for the Shares as to which the Option is being exercised, and upon compliance with any other condition(s) set forth in the Option Agreement. Such notice shall be signed by the person exercising the Option, shall state the number of Shares with respect to which the Option is being exercised and shall contain any representation required by the Plan or the Option Agreement. Payment of the purchase price for the Shares as to which such Option is being exercised shall be made (a) in United States dollars in cash or by check, or (b) at the discretion of the Administrator, through delivery of shares of Common Stock having a Fair Market Value equal as of the date of the exercise to the cash exercise price of the Option and held for at least six months, or (c) at the discretion of the Administrator, by delivery of the grantee's personal note, for full, partial or no recourse, bearing interest payable not less than annually at market rate on the date of exercise and at no less than 100% of the applicable Federal rate, as defined in Section 1274(d) of the Code, with or without the pledge of such Shares as collateral, or (d) at the discretion of the Administrator, in accordance with a cashless exercise program established with a securities brokerage firm, and approved by the Administrator, or (e) at the discretion of the Administrator, by any combination of (a), (b), (c) and (d) above. Notwithstanding the foregoing, the Administrator shall accept only such payment on exercise of an ISO as is permitted by Section 422 of the Code.


The Company shall then reasonably promptly deliver the Shares as to which such Option was exercised to the Participant (or to the Participant's Survivors, as the case may be). In determining what constitutes "reasonably promptly," it is expressly understood that the issuance and delivery of the Shares may be delayed by the Company in order to comply with any law or regulation (including, without limitation, state securities or "blue sky" laws) which requires the Company to take any action with respect to the Shares prior to their issuance. The Shares shall, upon delivery, be fully paid, non-assessable Shares.


The Administrator shall have the right to accelerate the date of exercise of any installment of any Option; provided that the Administrator shall not accelerate the exercise date of any installment of any Option granted to an Employee as an ISO (and not previously converted into a Non-Qualified Option pursuant to Paragraph 26) if such acceleration would violate the annual vesting limitation contained in Section 422(d) of the Code, as described in Paragraph 6.B.d.


The Administrator may, in its discretion, amend any term or condition of an outstanding Option provided (i) such term or condition as amended is permitted by the Plan, (ii) any such amendment shall be made only with the consent of the Participant to whom the Option was granted, or in the event of the death of the Participant, the Participant's Survivors, if the amendment is adverse to the Participant, and (iii) any such amendment of any ISO shall be made only after the Administrator determines whether such amendment would constitute a "modification" of any Option which is an ISO (as that term is defined in Section 424(h) of the Code) or would cause any adverse tax consequences for the holder of such ISO.


9. ACCEPTANCE OF STOCK GRANT AND ISSUE OF SHARES.


A Stock Grant (or any part or installment thereof) shall be accepted by executing the Stock Grant Agreement and delivering it to the Company or its designee, together with provision for payment of the full purchase price, if any, in accordance with this Paragraph for the Shares as to which such Stock Grant is being accepted, and upon compliance with any other conditions set forth in the Stock Grant Agreement. Payment of the purchase price for the Shares as to which such Stock Grant is being accepted shall be made (a) in United States dollars in cash or by check, or (b) at the discretion of the Administrator, through delivery of shares of Common Stock held for at least six months and having a Fair Market Value equal as of the date of acceptance of the Stock Grant to the purchase price of the Stock Grant, or (c) at the discretion of the Administrator, by delivery of the grantee's personal note, for full or partial recourse as determined by the Administrator, bearing interest payable not less than annually at no less than 100% of the applicable Federal rate, as defined in Section 1274(d) of the Code, or (d) at the discretion of the Administrator, by any combination of (a), (b) and (c) above.


The Company shall then reasonably promptly deliver the Shares as to which such Stock Grant was accepted to the Participant (or to the Participant's Survivors, as the case may be), subject to any escrow provision set forth in the Stock Grant Agreement. In determining what constitutes "reasonably promptly," it is expressly understood that the issuance and delivery of the Shares may be delayed by the Company in order to comply with any law or regulation


(including, without limitation, state securities or "blue sky" laws) which requires the Company to take any action with respect to the Shares prior to their issuance.


The Administrator may, in its discretion, amend any term or condition of an outstanding Stock Grant or Stock Grant Agreement provided (i) such term or condition as amended is permitted by the Plan, and (ii) any such amendment shall be made only with the consent of the Participant to whom the Stock Grant was made, if the amendment is adverse to the Participant.


10. RIGHTS AS A SHAREHOLDER.


No Participant to whom a Stock Right has been granted shall have rights as a shareholder with respect to any Shares covered by such Stock Right, except after due exercise of the Option or acceptance of the Stock Grant and tender of the full purchase price, if any, for the Shares being purchased pursuant to such exercise or acceptance and registration of the Shares in the Company's share register in the name of the Participant.


11. ASSIGNABILITY AND TRANSFERABILITY OF STOCK RIGHTS.


By its terms, a Stock Right granted to a Participant shall not be transferable by the Participant other than (i) by will or by the laws of descent and distribution, or (ii) as approved by the Administrator in its discretion and set forth in the applicable Option Agreement or Stock Grant Agreement. Notwithstanding the foregoing, an ISO transferred except in compliance with clause (i) above shall no longer qualify as an ISO. The designation of a beneficiary of a Stock Right by a Participant, with the prior approval of the Administrator and in such form as the Administrator shall prescribe, shall not be deemed a transfer prohibited by this Paragraph. Except as provided above, a Stock Right shall only be exercisable or may only be accepted, during the Participant's lifetime, only by such Participant (or by his or her legal representative) and shall not be assigned, pledged or hypothecated in any way (whether by operation of law or otherwise) and shall ...