exv10w1





Exhibit 10.1










July 30, 2009

Revised August 4, 2009

Further Revised August 12, 2009

Further Revised August 16, 2009




John A. Schmidt, MD

19 Fairway Drive

Green Brook, NJ 08812




Dear Jack:




     This letter agreement sets forth the terms of the termination of your employment based upon
your decision to resign your position with Alnylam Pharmaceuticals, Inc. (the “Company”). This
letter agreement also summarizes the terms of the separation package that the Company is willing to
offer you. Please read this letter agreement, which includes a general release, carefully. If
you are willing to agree to its terms, please sign in the space provided below and return it to me
within the designated time period.



     1. By signing this letter, you confirm your intent to resign your position as Chief Scientific
Officer effective as of September 30, 2009 (“the Separation Date”). You will be paid for time
worked through the Separation Date at your current gross bi-weekly rate of pay pursuant to the
Company’s regular payroll practices. You will also be paid for any unused and accrued vacation
time (if any) as of the Separation Date, less lawful deductions. During the period August 10, 2009
through September 30, 2009, you will work from your home and will use your best efforts to perform
tasks that may be assigned to you from time to time by John Maraganore, Chief Executive Officer,
and otherwise keep yourself available for consultation with the Company during regular business
hours. In the event you do not sign this letter agreement and confirm your decision to resign
effective September 30, 2009, your employment will terminate as of August 21, 2009.




	 	a.	 	Under the terms and conditions of the Amended and Restated 2004
Stock Incentive Plan, 25% of the stock options to purchase 200,000 shares of
common stock awarded to you on September 29, 2008 will vest and become
exercisable as of September 29, 2009. Pursuant to the terms of your stock
option agreement(s), you will have three months following the Separation Date to
exercise such vested stock options (the “Exercise Period”). Your right to
exercise such stock options will terminate on the last day of the Exercise
Period, subject to your compliance with the terms and conditions of your stock
option agreement(s), and any unexercised stock options will be immediately
cancelled. Subject to compliance with the federal securities laws relating to
insider trading, there is no restriction on the timing or manner of your sale of
the underlying shares of common stock acquired following the exercise of your
vested stock options.




 









 












	 	b.	 	Under the provisions of the Alnylam Pharmaceuticals, Inc. Savings
and Investment Plan, as amended, the Company matches, at its discretion, up to
50% of the first 6% of your contributions to your account in the form of Company
common stock. The matching contributions are subject to a two-year vesting
schedule: 50% of the match vests after one year of employment and the remaining
50% vests after the second full year of employment.





     2. After the Separation Date, except as provided below, you will not be entitled to receive
any benefits paid by, or participate in any benefit programs offered by the Company to its
employees. You will receive, under separate cover, information concerning your right to continue
your health insurance benefits after that date in accordance with COBRA and the American Recovery
and Reinvestment Act of 2009. You will not receive any monies under the Company’s 2009 Annual
Incentive Program.



     3. In consideration for signing this letter agreement and general release and in compliance
with the promises made herein, and in the event you sign this agreement and return it to me within
time period set forth in the agreement and do not revoke your acceptance pursuant to paragraph 9
below, the Company agrees as follows:




	 	a.	 	Provided that you remain employed in good standing through the
Separation Date, the Company will pay you severance in the gross amount of two
hundred twelve thousand, five hundred dollars ($212,500), an amount equal to six
(6) months of your gross base salary. From that gross amount will be deducted
all appropriate tax and FICA withholdings. However, in order to be eligible
for the payment described in this subparagraph (a) you must sign a second
General Release, in the form attached as Exhibit 1, after your last day of
employment and not thereafter revoke that second General Release. You
specifically agree that you will not sign a General Release in the form attached
as Exhibit 1 prior to your last day of employment. Payment of the
amounts described in this subparagraph (a) will be made in twelve (12)
semi-monthly installments beginning in the first payroll cycle that is at least
fifteen (15) business days after you sign the second General Release in the form
attached as Exhibit 1 and continuing for eleven (11) subsequent semi-monthly
periods.
	 
	 	b.	 	You will not be responsible for repayment of the $175,000.00
payment you received on or about January 15, 2009. (You are not eligible for the
additional payment of $100,000.00 you would have received had you been employed
on January 15, 2010.)
	 
	 	c.	 	You will not be responsible for repayment of any relocation
benefits previously provided by the Company. The Company will reimburse you for
the cost of temporary local housing through August 31, 2009 and furniture rental
through August 18, 2009 under your existing leases. In addition, the Company
will pay the cost of any early termination penalty under your existing leases.
The





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	 	 	 	Company will also pay you an additional amount to offset any income taxes
associated with these payments.
	 
	 	d.	 	The Company will pay the full cost of your COBRA premiums until
the earlier of (i) March 31, 2010 or (ii) the date you become eligible for
coverage under the group health plan of another employer; provided that you
properly elect to continue such coverage under COBRA. Thereafter, you will be
responsible for the full cost of COBRA coverage. You agree to promptly notify
the Company if you become eligible for coverage under the group health plan of
another employer prior to March 31, 2010.
	 
	 	e.	 	The Company will pay for your use of outplacement services up to
a maximum amount of ten thousand dollars ($10,000). The provider of the
outplacement services selected by you shall submit invoice(s) for services
directly to the Company, and payments made by the Company for your outplacement
services shall not be attributable to you by the Company as income. The Company
can assist you in identifying an outplacement service provider.





     4. You understand and agree that you would not receive the monies and/or benefits specified in
Paragraph No. 3 above, except for your execution of this letter agreement and general release and
the fulfillment of the promises contained therein.



     5. In consideration of the payments to be made by the Company to you as set forth in Paragraph
No. 3 above and the promises contained in this letter agreement and general release, you
voluntarily, and of your own free will, release, forever discharge and hold harmless Alnylam
Pharmaceuticals, Inc., its parent corporation, affiliates, subsidiaries, divisions, predecessors,
insurers, successors and assigns, and their current and former employees, attorneys, officers,
directors and agents thereof, both individually and in their business capacities, and their
employee benefit plans and programs and their administrators and fiduciaries (collectively referred
to throughout the remainder of this Agreement as “Releasees”) of and from any and all claims,
demands, rules or regulations, or any other causes of action of whatever nature, whether known or
unknown, which the you have or may have against Releasees as of the date you sign this letter
agreement including, but not limited to, The National Labor Relations Act, as amended; Title VII of
the Civil Rights Act of 1964, as amended; Sections 1981 through 1988 of Title 42 of the United
States Code, as amended; the Age Discrimination in Employment Act of 1967, as amended; the Older
Workers Benefit Protection Act; the Immigration Reform Control Act, as amended; the Employee
Retirement Income Security Act of 1974, 29 U.S.C. § 1001, et seq.; the Occupational
Safety and Health Act, as amended; the Civil Rights Act of 1866, 29 U.S.C. § 1981, et
seq; the Rehabilitation Act of 1973, 29 U.S.C. § 701, et seq.; the
Americans With Disabilities Act of 1990, as amended; the Family and Medical Leave Act; the Civil
Rights Act of 1991; the Massachusetts Law Against Discrimination, G.L. c. 151B; the Massachusetts
Wage and Hour Laws, G.L. c. 151; the Massachusetts Privacy Statute, G.L. c. 214, § 1B; the
Massachusetts Wage Payment Statute, G.L. c. 149, § 148 et seq.; the Massachusetts
Sexual Harassment Statute, G.L. c. 214 § 1C; the Massachusetts Civil Rights Act, G.L. c. 12, § 11H,
the Massachusetts Equal Rights Act, G.L. c. 93, § 102; or any other federal or state law,
regulation, or ordinance; any public policy, contract, tort, or common law; or any



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allegation for costs, fees, or other expenses including attorneys’ fees incurred in these
matters. You agree that neither this letter agreement and general release, nor the furnishing of
consideration for this letter agreement and general release, shall be deemed or construed at
anytime for any purpose as an admission by the Company of any liability or unlawful conduct of any
kind.




     6. You agree not to disclose to anyone, either directly or indirectly, any information
whatsoever regarding the existence or substance of this letter agreement and general release,
except your immediate family, attorneys, financial advisors, accountants, and tax preparation
professionals, provided that they agree to keep such information strictly confidential. This
includes, but is not limited to, present or former employees of the Company and other members of
the public. You further agree not to make or publish any written or oral disparaging or defamatory
statements regarding the Company (including, without limitation, its research and product
development), and its current and former employees, officers, directors and agents. Violation of
this paragraph shall be deemed a material breach of this agreement.



     7. You hereby acknowledge and reaffirm the validity of the Employee Nondisclosure,
Noncompetition and Assignment of Intellectual Property Agreement between you and the Company, the
terms and conditions of which are incorporated herein by reference and remain in full force and
effect for the full term stated therein and which survives the Separation Date. Notwithstanding
the foregoing, in consideration of your fulfillment of the promises contained herein and the
continued compliance with your obligations hereunder, the Company hereby agrees to limit the scope
of Paragraph 6 of such Employee Nondisclosure, Noncompetition and Assignment of Intellectual
Property Agreement as follows: “participate, directly or indirectly, in any capacity, in any
business involving the modulation of gene expression using RNA and RNA analogs” or any “other
business of developing, designing, producing, marketing, selling or rendering (or assisting any
other person in developing, designing, producing, marketing, selling or rendering) products or
services competitive with those being developed, designed, produced, marketed, sold or rendered by
the Company” shall be understood to cover only your employment, working directly with or for, any
direct competitors of the Company (which shall include, in each case in the form established and
subsisting as of the date of this Agreement, Sirna Therapeutics, Inc., a subsidiary of Merck & Co.,
Inc., the RNAi division of Pfizer Inc./Wyeth, RXi Pharmaceuticals Corporation, Silence Therapeutics
plc, MDRNA, Inc., Dicerna Pharmaceuticals, Inc. and AiRNA Pharmaceuticals, Inc.), and any affiliate
of the preceeding companies engaged in a similar business. You understand that the Company would
not provide you with the benefits under this letter agreement but for your reaffirmation of your
obligations under the Employee Nondisclosure, Noncompetition and Assignment of Intellectual
Property Agreement, as modified herein. You further understand and agree that your obligations
under this paragraph are material terms of this agreement, and that the Company shall have the
right, in addition to any other damages, to discontinue the salary continuation payments and seek
and obtain the return of the consideration already paid hereunder (without impacting the validity
or enforceability of the general release contained herein) in the event you breach any of your
obligations under this paragraph. By signing this Agreement, you affirm that you have not divulged
any proprietary or confidential information of the Company and will continue to maintain the
confidentiality of such information consistent with the Company’s policies and your Employee
Nondisclosure, Noncompetition and Assignment of Intellectual Property Agreement.



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     8. You will be afforded a period of up to (21) twenty-one days to consider the meaning and
effect of this letter agreement and general release. You are advised to consult with an attorney
and you acknowledge that you have had the opportunity to do so. You agree that any modifications,
material or otherwise, do not restart or affect in any manner the original 21-day consideration
period for the separation proposal made to you.



     9. You may revoke this letter agreement and general release for a period of seven (7) days
following the day you execute this letter agreement and general release. Any revocation within
this period must be submitted, in writing, to Eric Raichle, Vice President of Human Resources and
state, “I hereby revoke my acceptance of the letter agreement and general release.” The revocation
must be personally delivered to Eric Raichle, Vice President of Human Resources, Alnylam
Pharmaceuticals, Inc., 300 Third Street, Cambridge, MA 02142, or postmarked within seven (7) days
of execution of this letter agreement and general release. This letter agreement and general
release shall not become effective or enforceable until the revocation period has expired. If the
last day of the revocation period is a Saturday, Sunday, or legal holiday in Massachusetts, then
the revocation period shall not expire until the next following day which is not a Saturday,
Sunday, or legal holiday.



     10. This letter agreement and general release, which will be construed under Massachusetts
law, may not be modified, altered, or changed except upon express written consent of both parties
wherein specific reference is made to this letter agreement and general release.



     11. Nothing herein limits your right, where applicable, to file or participate in an
investigative proceeding of any federal, state or local governmental agency, provided however, that
by signing this Agreement, you waive the right to seek or receive any money damages based upon any
claim that might be asserted arising out of your employment at the Company. You further affirm that
you have been paid and have received all leave (paid or unpaid), compensation, wages, bonuses,
commissions, and/or benefits to which you may be entitled and that no other leave (paid or unpaid),
compensation, wages, bonuses, commissions and/or benefits are due to you, except as provided in
this letter agreement. You furthermore affirm that you have no known workplace injuries or
occupational diseases and have been provided and/or have not been denied any leave requested under
the Family and Medical Leave Act. You also affirm that you have not been retaliated against for
reporting any allegations of wrongdoing by the Company or its officers, including any allegations
of corporate fraud.



     12. You agree to timely complete any questionnaire and provide any other information requested
by the Company that is required to be disclosed as part of its corporate reporting obligations,
which request may come after the expiration of the salary continuation period.



     13. This letter agreement, which includes a general release, represents the complete agreement
between you and the Company, and fully supersedes any prior agreements or understandings between
the parties (including, without limitation, your offer letter dated September 5, 2008), other than
your Employee Nondisclosure, Noncompetition and Assignment of Intellectual Property Agreement as
set forth and referred to in paragraph 7, as so modified by paragraph 7. You acknowledge that you
have not relied on any representations, promises, or agreements of any kind



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made to you in connection with your decision to sign this letter agreement and general
release, except those set forth herein.



The Company would like to extend its appreciation to you for your past service, and its sincere
hope for success in your future endeavors.




	 	 	 	 	 
	 	Very truly yours,

 	 
	 	/s/ Eric Raichle
 	 
	 	Eric Raichle 	 
	 	Vice President, Human Resources 	 
	 




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ACKNOWLEDGMENT AND AGREEMENT



I acknowledge and agree that I have been advised in writing that I have a period of up to 21
calendar days to consider this letter agreement and general release and to consult with an attorney
prior to signing this letter agreement and general release.



Having elected to execute this letter agreement and general release, to fulfill the promises
set forth herein, and to receive thereby the sums and benefits set forth in Paragraph No. 3 above,
I freely and knowingly, and after due consideration, enter into this letter agreement and general
release intending to waive, settle, and release all claims I have or might have against the Company
and Releasees.




	 	 	 	 	 
	 	 	 
	Date:      August 21, 2009 	/s/ John A. Schmidt, MD
 	 
	 	John A. Schmidt, MD 	 
	 	 	 
	 




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EXHIBIT 1




GENERAL RELEASE




     In consideration for the promises made to John A. Schmidt, MD by Alnylam Pharmaceuticals (“the
Company”) in a letter agreement and general release signed by the Company on July 30, 2009,
including but not limited to the promise in that letter agreement and general release to pay to Dr.
Schmidt the gross amount of two hundred twelve thousand, five hundred ($212,500), an amount equal
to six (6) months of Dr. Schmidt’s gross base salary and the full cost of any COBRA premiums for
the period October 1, 2009 to March 31, 2010, unless eligible for group health insurance coverage
through another employer prior to March 31, 2010 (and provided that Dr. Schmidt does not revoke
this General Release), John A. Schmidt, MD agrees that by signing this General Release, he
voluntarily and of his own free will releases, forever discharges and holds harmless Alnylam
Pharmaceuticals, Inc., its parent corporation, affiliates, subsidiaries, divisions, predecessors,
insurers, successors and assigns, and their current and former employees, attorneys, officers,
directors and agents thereof, both individually and in their business capacities, and their
employee benefit plans and programs and their administrators and fiduciaries (collectively referred
to throughout the remainder of this Agreement as “Releasees”) of and from any and all claims,
demands, rules or regulations, or any other causes of action of whatever nature, whether known or
unknown, which the you have or may have against Releasees as of the date you sign this letter
agreement including, but not limited to, The National Labor Relations Act, as amended; Title VII of
the Civil Rights Act of 1964, as amended; Sections 1981 through 1988 of Title 42 of the United
States Code, as amended; the Age Discrimination in Employment Act of 1967, as amended; the Older
Workers Benefit Protection Act; the Immigration Reform Control Act, as amended; the Employee
Retirement Income Security Act of 1974, 29 U.S.C. § 1001, et seq.; the Occupational
Safety and Health Act, as amended; the Civil Rights Act of 1866, 29 U.S.C. § 1981, et
seq; the Rehabilitation Act of 1973, 29 U.S.C. § 701, et seq.; the
Americans With Disabilities Act of 1990, as amended; the Family and Medical Leave Act; the Civil
Rights Act of 1991; the Massachusetts Law Against Discrimination, G.L. c. 151B; the Massachusetts
Wage and Hour Laws, G.L. c. 151; the Massachusetts Privacy Statute, G.L. c. 214, § 1B; the
Massachusetts Wage Payment Statute, G.L. c. 149, § 148 et seq.; the Massachusetts
Sexual Harassment Statute, G.L. c. 214 § 1C; the Massachusetts Civil Rights Act, G.L. c. 12, § 11H,
the Massachusetts Equal Rights Act, G.L. c. 93, § 102; The New Jersey Law Against Discrimination;
The New Jersey Civil Rights Act; The New Jersey Family Leave Act; The New Jersey State Wage and
Hour Law; The New Jersey Conscientious Employee Protection Act; The New Jersey Equal Pay Law; The
New Jersey Occupational Safety and Health Law; The New Jersey Smokers’ Rights Law; The New Jersey
Genetic Privacy Act; The New Jersey Fair Credit Reporting Act; The New Jersey Statutory Provision
Regarding Retaliation/Discrimination for Filing A Workers’ Compensation Claim; The New Jersey
Public Employees’ Occupational Safety and Health Act; New Jersey laws regarding Political
Activities of Employees, Lie Detector Tests, Jury Duty, Employment Protection, and Discrimination.
or any other federal or state law, regulation, or ordinance; any public policy, contract, tort, or
common law; or any allegation for costs, fees, or other expenses including attorneys’ fees incurred
in these matters.



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     By signing this General Release, Dr. Schmidt affirms that he has not filed, caused to be
filed, or presently is a party to any claim against any of the Releasees. Dr. Schmidt also affirms
that he has been paid and/or has received all compensation, wages, bonuses, commissions, and/or
benefits to which he may be entitled. Dr. Schmidt affirms that he has been granted any leave to
which he was entitled under the Family and Medical Leave Act or related state or local leave or
disability accommodation laws, and that he has no known workplace injuries or occupational
diseases.



     By signing this Agreement, Dr. Schmidt affirms that he has not divulged any proprietary or
confidential information of the Company and will continue to maintain the confidentiality of such
information consistent with the Company’s policies and his Employee Nondisclosure, Noncompetition
and Assignment of Intellectual Property Agreement.



     Dr. Schmidt further affirms that he has not been retaliated against for reporting any
allegations of wrongdoing by the Company or its officers, including any allegations of corporate
fraud. Both Parties acknowledge that this Agreement does not limit either party’s right, where
applicable, to file or participate in an investigative proceeding of any federal, state or local
governmental agency. To the extent permitted by law, Dr. Schmidt agrees that if such an
administrative claim is made, he shall not be entitled to recover any individual monetary relief or
other individual remedies. Dr. Schmidt also affirms that he is in possession of all of his
property that he had at the Company’s premises and that the Company is not in possession of any of
Dr. Schmidt’s property.



     Dr. Schmidt will be afforded a period of up to (21) twenty-one days to consider the meaning
and effect of this General Release. Dr. Schmidt is advised to consult with an attorney before
signing this General Release and he acknowledges that he has had the opportunity to do so. Dr.
Schmidt agrees that any modifications, material or otherwise, do not restart or affect in any
manner the original 21-day consideration period for the separation proposal made to Dr. Schmidt.
Dr. Schmidt may revoke this General Release for a period of seven (7) days following the day he
signs it. Any revocation within this period must be submitted, in writing, to Eric Raichle, Vice
President of Human Resources and state, “I hereby revoke my acceptance of the letter agreement and
general release.” The revocation must be personally delivered to Eric Raichle, Vice President of
Human Resources, Alnylam Pharmaceuticals, Inc., 300 Third Street, Cambridge, MA 02142, or
postmarked within seven (7) days of execution of this letter agreement and general release. This
General Release shall not become effective or enforceable until the revocation period has expired.
If the last day of the revocation period is a Saturday, Sunday, or legal holiday in Massachusetts,
then the revocation period shall not expire until the next following day which is not a Saturday,
Sunday,



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or legal holiday. Dr. Schmidt is also advised that he should not sign this General Release until
after September 30, 2009 unless his employment ends involuntarily prior to that date and an
authorized representative of the Company notifies him in writing that he may do so.




	 	 	 	 	 
	ACKNOWLEDGED AND AGREED TO:

 
	 	/s/ John A. Schmidt, MD
 	 
	 	John A. Schmidt, MD 	 

	 
	 	Date: October 1, 2009 	 
	 
	 	Alnylam Pharmaceuticals, Inc.

 	 
	 	By:  	/s/ Eric Raichle
 	 
	 	 	 	 
	 	 	Date: October 5, 2009 	 
	 




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