exv10w8



 





Exhibit 10.8




ALNYLAM PHARMACEUTICALS, INC.




2004 EMPLOYEE STOCK PURCHASE PLAN




     The purpose of this Plan is to provide eligible employees of Alnylam Pharmaceuticals, Inc., a
Delaware corporation (the “Company”), and certain of its subsidiaries with opportunities to
purchase shares of the Company’s common stock, $.0001 par value (the “Common Stock”). An aggregate
of 315,789 shares of Common Stock have been approved for this purpose. This Plan is intended to
qualify as an “employee stock purchase plan” as defined in Section 423 of the Internal Revenue Code
of 1986, as amended (the “Code”), and the regulations promulgated thereunder, and shall be
interpreted consistent therewith.



     1. Administration. The Plan will be administered by the Company’s Board of Directors
(the “Board”) or by a Committee appointed by the Board (the “Committee”). The Board or the
Committee has authority to make rules and regulations for the administration of the Plan and its
interpretation and decisions with regard thereto shall be final and conclusive.



     2. Eligibility. All employees of the Company and all employees of any subsidiary of
the Company (as defined in Section 424(f) of the Code) designated by the Board or the Committee
from time to time (a “Designated Subsidiary”), are eligible to participate in any one or more of
the offerings of Options (as defined in Section 9) to purchase Common Stock under the Plan provided
that:




          (a) they are customarily employed by the Company or a Designated Subsidiary for more
than twenty (20) hours a week and for more than five (5) months in a calendar year; and




          (b) they have been employed by the Company or a Designated Subsidiary for at least six
(6) months prior to enrolling in the Plan;




          (c) they are employees of the Company or a Designated Subsidiary on the first day of
the applicable Plan Period (as defined below); and




          (d) in the case of an executive officer of the Company or a Designated Subsidiary, they
are not considered a “highly compensated individual” within the meaning of Section 414(q) of
the Code.



     No employee may be granted an option hereunder if such employee, immediately after the option
is granted, owns 5% or more of the total combined voting power or value of the stock of the Company
or any subsidiary. For purposes of the preceding sentence, the attribution rules of Section 424(d)
of the Code shall apply in determining the stock ownership of an employee, and all stock which the
employee has a contractual right to purchase shall be treated as stock owned by the employee.



     3. Offerings. The Company will make one or more offerings (“Offerings”) to employees
to purchase stock under this Plan. Offerings will begin each November 1 or the first business day
thereafter (the “Offering Commencement Dates”). Each Offering Commencement Date will begin a
twelve-month period (a “Plan Period”) during which payroll deductions will be



 









 







made and held for the purchase of Common Stock at the end of the Plan Period. The Board or
the Committee may, at its discretion, choose a different Plan Period of twelve (12) months or less
for subsequent Offerings. Notwithstanding anything to the contrary, the first Plan Period shall
begin on the later of November 1, 2004 or the first date that the Common Stock is publicly traded
following the Company’s IPO (the “IPO Date”), and shall end on October 31, 2005.



     4. Participation. An employee eligible on the Offering Commencement Date of any
Offering may participate in such Offering by completing and forwarding a payroll deduction
authorization form to the employee’s appropriate payroll office at least five (5) business days
prior to the applicable Offering Commencement Date. The form will authorize a regular payroll
deduction from the Compensation received by the employee during the Plan Period. Unless an
employee files a new form or withdraws from the Plan, his deductions and purchases will continue at
the same rate for future Offerings under the Plan as long as the Plan remains in effect. The term
“Compensation” means the amount of money reportable on the employee’s Federal Income Tax
Withholding Statement, excluding overtime, shift premium, incentive or bonus awards, allowances and
reimbursements for expenses such as relocation allowances for travel expenses, income or gains on
the exercise of Company stock options or stock appreciation rights, amounts imputed in respect of
benefit programs and similar items, whether or not shown on the employee’s Federal Income Tax
Withholding Statement, but including, in the case of salespersons, sales commissions to the extent
determined by the Board or the Committee.



     5. Deductions. The Company will maintain payroll deduction accounts for all
participating employees. With respect to any Offering made under this Plan, an employee may
authorize a payroll deduction in any dollar amount up to a maximum of 15% of the Compensation he or
she receives during the Plan Period or such shorter period during which deductions from payroll are
made. Payroll deductions may be at the rate of 1%, 2%, 3%, 4%, 5%, 6%, 7%, 8%, 9%, 10%, 11%, 12%,
13%, 14% or 15% of Compensation with any change in compensation during the Plan Period to result in
an automatic corresponding change in the dollar amount withheld. The minimum payroll deduction is
such percentage of compensation as may be established from time to time by the Board or the
Committee.



     6. Deduction Changes. An employee may decrease or discontinue his payroll deduction
once during any Plan Period, by filing a new payroll deduction authorization form. However, an
employee may not increase his payroll deduction during a Plan Period. If an employee elects to
discontinue his payroll deductions during a Plan Period, but does not elect to withdraw his funds
pursuant to Section 8 hereof, funds deducted prior to his election to discontinue will be applied
to the purchase of Common Stock on the Exercise Date (as defined below).



     7. Interest. Interest will not be paid on any employee accounts.



     8. Withdrawal of Funds. An employee may at any time prior to the close of business on
the last business day in a Plan Period and for any reason permanently draw out the balance
accumulated in the employee’s account and thereby withdraw from participation in an Offering.
Partial withdrawals are not permitted. The employee may not begin participation again during the
remainder of the Plan Period. The employee may participate in any subsequent Offering in
accordance with terms and conditions established by the Board or the Committee.



- 2 -









 





     9. Purchase of Shares. On the Offering Commencement Date of each Plan Period, the
Company will grant to each eligible employee who is then a participant in the Plan an option
(“Option”) to purchase on the last business day of such Plan Period (the “Exercise Date”), at the
Option Price hereinafter provided for, the largest number of whole shares of Common Stock of the
Company as does not exceed the number of shares determined by multiplying $2,083 by the number of
full months in the Offering Period and dividing the result by the closing price (as defined below)
on the Offering Commencement Date of such Plan Period.



     Notwithstanding the above, no employee may be granted an Option which permits his rights to
purchase Common Stock under this Plan and any other employee stock purchase plan (as defined in
Section 423(b) of the Code) of the Company and its subsidiaries, to accrue at a rate which exceeds
$25,000 of the fair market value of such Common Stock (determined at the Offering Commencement Date
of the Plan Period) for each calendar year in which the Option is outstanding at any time.



     The purchase price for each share purchased will be 85% of the closing price of the Common
Stock on (i) the Offering Commencement Date of such Plan Period or (ii) the Exercise Date,
whichever closing price shall be less. Such closing price shall be (a) the closing price on any
national securities exchange on which the Common Stock is listed, (b) the closing price of the
Common Stock on the Nasdaq National Market or (c) the average of the closing bid and asked prices
in the over-the-counter-market, whichever is applicable, as published in The Wall Street
Journal; provided that, with respect to the first Plan Period, if the first day of such Plan
Period is the IPO Date, the closing price of the Common Stock on the first business day of such
Plan Period shall be deemed to be the initial public offering price for the Common Stock, as set
forth in the final prospectus relating to the IPO. If no sales of Common Stock were made on such a
day, the price of the Common Stock for purposes of clauses (a) and (b) above shall be the reported
price for the next preceding day on which sales were made.



     Each employee who continues to be a participant in the Plan on the Exercise Date shall be
deemed to have exercised his Option at the Option Price on such date and shall be deemed to have
purchased from the Company the number of full shares of Common Stock reserved for the purpose of
the Plan that his accumulated payroll deductions on such date will pay for, but not in excess of
the maximum number determined in the manner set forth above.



     Any balance remaining in an employee’s payroll deduction account at the end of a Plan Period
will be automatically refunded to the employee, except that any balance which is less than the
purchase price of one share of Common Stock will be carried forward into the employee’s payroll
deduction account for the following Offering, unless the employee elects not to participate in the
following Offering under the Plan, in which case the balance in the employee’s account shall be
refunded.



     10. Issuance of Certificates. Certificates representing shares of Common Stock
purchased under the Plan may be issued only in the name of the employee, in the name of the
employee and another person of legal age as joint tenants with rights of survivorship, or (in the
Company’s sole discretion) in the name of a brokerage firm, bank or other nominee holder designated
by the employee. The Company may, in its sole discretion and in compliance with



- 3 -









 







applicable laws, authorize the use of book entry registration of shares in lieu of issuing
stock certificates.



     11. Rights on Retirement, Death or Termination of Employment. In the event of a
participating employee’s termination of employment prior to the last business day of a Plan Period,
no payroll deduction shall be taken from any pay due and owing to an employee and the balance in
the employee’s account shall be paid to the employee or, in the event of the employee’s death, (a)
to a beneficiary previously designated in a revocable notice signed by the employee (with any
spousal consent required under state law) or (b) in the absence of such a designated beneficiary,
to the executor or administrator of the employee’s estate or (c) if no such executor or
administrator has been appointed to the knowledge of the Company, to such other person(s) as the
Company may, in its discretion, designate. If, prior to the last business day of the Plan Period,
the Designated Subsidiary by which an employee is employed shall cease to be a subsidiary of the
Company, or if the employee is transferred to a subsidiary of the Company that is not a Designated
Subsidiary, the employee shall be deemed to have terminated employment for the purposes of this
Plan.



     12. Optionees Not Stockholders. Neither the granting of an Option to an employee nor
the deductions from his pay shall constitute such employee a stockholder of the shares of Common
Stock covered by an Option under this Plan until such shares have been purchased by and issued to
him.



     13. Rights Not Transferable. Rights under this Plan are not transferable by a
participating employee other than by will or the laws of descent and distribution, and are
exercisable during the employee’s lifetime only by the employee.



     14. Application of Funds. All funds received or held by the Company under this Plan
may be combined with other corporate funds and may be used for any corporate purpose.



     15. Adjustment in Case of Changes Affecting Common Stock. In the event of a
subdivision of outstanding shares of Common Stock, or the payment of a dividend in Common Stock,
the number of shares approved for this Plan, and the share limitation set forth in Section 9, shall
be increased proportionately, and such other adjustment shall be made as may be deemed equitable by
the Board or the Committee. In the event of any other change affecting the Common Stock, such
adjustment shall be made as may be deemed equitable by the Board or the Committee to give proper
effect to such event.



     16. Merger. If the Company shall at any time merge or consolidate with another
corporation and the holders of the capital stock of the Company immediately prior to such merger or
consolidation continue to hold at least a majority by voting power of the capital stock of the
surviving corporation (“Continuity of Control”), the holder of each Option then outstanding will
thereafter be entitled to receive at the next Exercise Date upon the exercise of such Option for
each share as to which such Option shall be exercised the securities or property which a holder of
one share of the Common Stock was entitled to upon and at the time of such merger or consolidation,
and the Board or the Committee shall take such steps in connection with such merger or
consolidation as the Board or the Committee shall deem necessary to assure that the provisions of
Section 15 shall thereafter be applicable, as nearly as reasonably may be, in



- 4 -









 







relation to the said securities or property as to which such holder of such Option might
thereafter be entitled to receive thereunder.



     In the event of a merger or consolidation of the Company with or into another corporation
which does not involve Continuity of Control, or of a sale of all or substantially all of the
assets of the Company while unexercised Options remain outstanding under the Plan, (a) subject to
the provisions of clauses (b) and (c), after the effective date of such transaction, each holder of
an outstanding Option shall be entitled, upon exercise of such Option, to receive in lieu of shares
of Common Stock, shares of such stock or other securities as the holders of shares of Common Stock
received pursuant to the terms of such transaction; or (b) all outstanding Options may be cancelled
by the Board or the Committee as of a date prior to the effective date of any such transaction and
all payroll deductions shall be paid out to the participating employees; or (c) all outstanding
Options may be cancelled by the Board or the Committee as of the effective date of any such
transaction, provided that notice of such cancellation shall be given to each holder of an Option,
and each holder of an Option shall have the right to exercise such Option in full based on payroll
deductions then credited to his account as of a date determined by the Board or the Committee,
which date shall not be less than ten (10) days preceding the effective date of such transaction.



     17. Amendment of the Plan. The Board may at any time, and from time to time, amend
this Plan in any respect, except that (a) if the approval of any such amendment by the shareholders
of the Company is required by Section 423 of the Code, such amendment shall not be effected without
such approval, and (b) in no event may any amendment be made which would cause the Plan to fail to
comply with Section 423 of the Code.



     18. Insufficient Shares. In the event that the total number of shares of Common Stock
specified in elections to be purchased under any Offering plus the number of shares purchased under
previous Offerings under this Plan exceeds the maximum number of shares issuable under this Plan,
the Board or the Committee will allot the shares then available on a pro rata basis.



     19. Termination of the Plan. This Plan may be terminated at any time by the Board.
Upon termination of this Plan all amounts in the accounts of participating employees shall be
promptly refunded.



     20. Governmental Regulations. The Company’s obligation to sell and deliver Common
Stock under this Plan is subject to listing on a national stock exchange or quotation on the Nasdaq
National Market (to the extent the Common Stock is then so listed or quoted) and the approval of
all governmental authorities required in connection with the authorization, issuance or sale of
such stock.



     21. Governing Law. The Plan shall be governed by Delaware law except to the extent
that such law is preempted by federal law.



     22. Issuance of Shares. Shares may be issued upon exercise of an Option from
authorized but unissued Common Stock, from shares held in the treasury of the Company, or from any
other proper source.



- 5 -









 





     23. Notification upon Sale of Shares. Each employee agrees, by entering the Plan, to
promptly give the Company notice of any disposition of shares purchased under the Plan where such
disposition occurs within two (2) years after the date of grant of the Option pursuant to which
such shares were purchased.



     24. Special Provisions for First Plan Period. If the first day of the first Plan
Period is the IPO Date, the following provisions of this Section 24 shall apply with respect to the
first Plan Period notwithstanding any provision of the Plan to the contrary:



          (a) Every eligible employee shall automatically become a participant in the Plan for the first
Plan Period at the highest percentage of Compensation permitted under Section 5. No payroll
deductions shall be required for the first Plan Period; however, a participant may, at any time
after the effectiveness of the Plan’s Registration Statement on Form S-8, elect to have payroll
deductions up to the aggregate amount which would have been credited to his or her account if a
deduction of fifteen percent (15%) of the Compensation which he or she received on each pay day
during the first Plan Period had been made (the “Maximum Amount”) or decline to participate by
filing an appropriate subscription agreement.




          (b) Upon the automatic exercise of a participant’s option on the Exercise Date for the first
Plan Period, a participant shall be permitted to purchase shares with (i) the accumulated payroll
deductions in his or her account, if any, (ii) a direct payment from the participant, or (iii) a
combination thereof; provided, however that the total amount applied to the purchase may not exceed
the Maximum Amount.




     25. Withholding. Each employee shall, no later than the date of the event creating the
tax liability, make provision satisfactory to the Board for payment of any taxes required by law to
be withheld in connection with any transaction related to Options granted to or shares acquired by
such employee pursuant to the Plan. The Company may, to the extent permitted by law, deduct any
such taxes from any payment of any kind otherwise due to an employee.



     26. Effective Date and Approval of Shareholders. The Plan shall take effect on the
IPO Date, subject to approval by the shareholders of the Company as required by Section 423 of the
Code, which approval must occur within twelve months of the adoption of the Plan by the Board.



- 6 -









 





AMENDMENT NO. 1 TO

2004 EMPLOYEE STOCK PURCHASE PLAN

OF

ALNYLAM PHARMACEUTICALS, INC.




     The 2004 Employee Stock Purchase Plan (the “Plan”) of Alnylam Pharmaceuticals, Inc. is hereby
amended as follows:



     Section 2(b) is deleted in its entirety and the following is substituted in its place:



     “(b) they have been employed by the Company or a Designated Subsidiary for at least three (3)
months prior to enrolling in the Plan;”



     Except as set forth above, the remainder of the Plan remains in full force and effect.



	 	 	 
	 

	 	Adopted by the Compensation Committee of
the Board of Directors on June 1, 2007.