Document:

exv10w3

 

EXHIBIT 10.3

ZIX CORPORATION

STOCK OPTION AGREEMENT

     THIS STOCK OPTION AGREEMENT (“Agreement”) is made and entered into as of the date set forth on
the signature page attached hereto (the “Signature Page”) with respect to the stock options granted
by Zix Corporation, a Texas corporation (the “Company”), to the Optionee (“Optionee”) listed on the
signature page hereto.

     WHEREAS, the Company wishes to recognize the contributions of the Optionee to the Company and
to encourage the Optionee’s sense of proprietorship in the Company by owning the Common Stock, par
value $.01 per share (the “Common Stock”), of the Company;

     NOW, THEREFORE, in consideration of the mutual agreements and covenants contained herein, the
Company hereby grants to the Optionee a non-qualified stock option (“Option”) to purchase up to the
total number of shares of the Common Stock set forth on the Signature Page at the price per share
(the “Option Price”) as set forth on the Signature Page on the terms and conditions and subject to
the restrictions as set forth in this Agreement and the provisions of the applicable Zix
Corporation stock option plan (which is incorporated herein by reference) (the “Plan”), which is
referenced on the Signature Page. All defined terms contained herein shall have the meanings
ascribed to them in the Plan, except as otherwise provided herein.

1. Definitions.

     a. Affiliate. “Affiliate” shall have the meaning ascribed to such terms in Rule 12b-2
of the General Rules and Regulations under the Exchange Act in effect on the date of this
Agreement.

     b. Change in Control. A “Change in Control” of the Company shall have occurred if
during the term of this Agreement, any of the following events shall occur:

     (i) The Company is merged, consolidated or reorganized into or with another corporation
or other legal person and as a result of such merger, consolidation or reorganization, the
Company or its shareholders or Affiliates immediately before such transaction beneficially
own, immediately after or as a result of such transaction, equity securities of the
surviving or acquiring corporation or such corporation’s parent corporation possessing less
than fifty-one percent (51%) of the voting power of the surviving or acquiring person or
such person’s parent corporation;

     (ii) The Company sells all or substantially all of its assets to any other corporation
or other legal person and as a result of such sale, the Company or its shareholders or
Affiliates immediately before such transaction beneficially own, immediately after or as a
result of such transaction, equity securities of the surviving or acquiring corporation or
such corporation’s parent corporation possessing less than fifty-

	 	 
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one percent (51%) of the voting power of the surviving or acquiring person or such
person’s parent corporation (provided that this provision shall not apply to a registered
public offering of securities of a subsidiary of the Company, which offering is not part of
a transaction otherwise a part of or related to a Change in Control).

     c. Disability. “Disability” shall mean any medically determinable physical or mental
impairment that, in the opinion of the Committee, based upon medical reports and other evidence
satisfactory to the Committee, can reasonably be expected to prevent the Optionee from performing
substantially all of his or her customary duties of employment (with or without reasonable
accommodation) for a continuous period of not less than 12 months.

     d. Resignation. “Resignation” shall mean the voluntary termination by the Optionee of
his or her employment relationship with the employing Subsidiary and, if applicable, Company under
circumstances other than voluntary Retirement.

     e. Retirement. “Retirement” shall mean the termination of Optionee’s employment in
accordance with the requirements of a written retirement plan, policy or rule of the Company that
has been duly adopted by the Company or employing Subsidiary, as applicable.

2. Term of Option. The term of this Option shall expire on the expiration date set forth
in the Signature Page (the “stated term”), except as such term may be otherwise shortened by the
other provisions of the Plan or this Agreement.

3. Exercise of Option.

     a. Exercise. This Option shall become exercisable in increments as set forth in the
Signature Page. However, this Option shall become exercisable upon the occurrence of a Change in
Control as to all options that have not vested as of the occurrence of the Change in Control.
Except as provided in the Plan, the Option shall not be exercisable unless Optionee shall, at the
time of exercise, be an employee of the Company or a Subsidiary, and once the Option has become
exercisable with respect to a certain number of shares as provided above, it shall thereafter be
exercisable as to all of that number of shares, or as to any part thereof, until expiration or
termination of this Option. However, this Option may not be exercised as to less than 100 shares
at any one time (or the remaining shares then purchasable under this Option, if less than 100
shares).

     b. Adjustment. In the event there is any adjustment to the Common Stock the Board of
Directors or Committee shall make such adjustment as it deems appropriate to the number of shares
subject to the Option or to the Option Price, or both.

     c. Method of Exercise. This Option may be exercised only by written notice (the
“Exercise Notice”) by the Optionee to the Company at its principal executive office. The Exercise
Notice shall be deemed given when deposited in the U. S. mails, postage prepaid, addressed to the
Company at its principal executive office, or if given other than by deposit in the U.S. mails,
when delivered in person to an officer of the Company at that office. The date of

	 	 
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exercise of this
Option (the “Exercise Date”) shall be the date of the postmark if the notice is mailed or the date
received if the notice is delivered other than by mail. The Exercise Notice shall state the number
of shares in respect of which this Option is being exercised and, if the shares for which this
Option is being exercised are to be evidenced by more than one stock certificate, the denominations
in which the stock certificates are to be issued. The Exercise Notice shall be signed by the
Optionee and shall include the complete address of such person, together with such person’s social
security number.

     This Option may be exercised either by tendering cash in the amount of the Option Price or,
with the Company’s consent, by tendering shares of Common Stock (which may include shares
previously acquired upon exercise of options granted under the Plan). The Exercise Notice shall be
accompanied by payment of the aggregate Option Price of the shares purchased by cash, a certified
cashier’s check or, at the Company’s option, by delivery of shares of Common Stock having a Fair
Market Value on the date immediately preceding the exercise date equal to the Option Price.

     If the shares to be purchased are covered by an effective registration statement under the
Securities Act of 1933, as amended, any option granted under the Plan may be exercised by a
broker-dealer acting on behalf of an Optionee if (a) the broker-dealer has received from the
Optionee or the Company a fully- and duly-endorsed agreement evidencing such option, together with
instructions signed by the Optionee requesting the Company to deliver the shares of Common Stock
subject to such option to the broker-dealer on behalf of the Optionee and specifying the account
into which such shares should be deposited, (b) adequate provision has been made with respect to
the payment of any withholding taxes due upon such exercise, and (c) the broker-dealer and the
Optionee have otherwise complied with Section 220.3(e)(4) of Regulation T, 12 CFR Part 220, or any
successor provision.

     The certificates for shares of Common Stock as to which this Option shall have been so
exercised shall be registered in the name of the Optionee and shall be delivered to the Optionee at
the address specified in the Exercise Notice. An option exercise shall be valid only if the
Optionee makes payment or other arrangements relating to the withholding tax obligations discussed
in Paragraph 8. In the event the person exercising this Option is a transferee of the Optionee by
will or under the laws of descent and distribution, the Exercise Notice shall be accompanied by
appropriate proof of the right of such transferee to exercise this Option.

4. Termination of Option.

     In the event an Optionee ceases to be an employee of either the Company or a Subsidiary of the
Company due to death, Retirement, Resignation, Disability or termination by the Company for any
reason other than “cause” (such five events each being a “Qualified Termination”), this Option may
be exercised by the Optionee or his or her estate, personal representative or beneficiary to the
fullest extent that the Optionee was entitled to exercise the same on the day immediately prior to
such termination (i) at any time within the one-year period commencing on the day next following
such termination if such termination is due to the death of the Optionee; (ii) at any time within
the thirty-day period commencing on the day next following the effective

	 	 
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date of such termination
if such termination is due to the Resignation of the Optionee; or (iii) at any time within the six-month period commencing on the day next following such termination in the
case of any other Qualified Termination (or in any such case in (i), (ii) or (iii) above, if
shorter, only for the remaining stated term of this Option). In the event that the Optionee’s
employment is terminated for any reason other than a Qualified Termination, this Option shall
automatically expire simultaneously with such termination. For purposes of this Paragraph, “cause”
shall mean (i) the failure, in the sole opinion of the Company or a Subsidiary of the Company that
employs Optionee, of Optionee to adequately perform the duties assigned to Optionee (other than any
such failure resulting from Optionee’s Disability); (ii) the engagement by Optionee in misconduct
that, in the sole opinion of the Company or a Subsidiary of the Company that employs Optionee, is
or may have the effect of being materially injurious to the Company or its Subsidiaries; or (iii)
the conviction of Optionee of any felony or crime of moral turpitude.

     After the Optionee’s death, this Option shall be exercisable only by the executor or
administrator of the Optionee’s estate, or if the Optionee’s estate is not in administration, by
the person or persons to whom the Optionee’s rights shall have passed by the Optionee’s will or
under the laws of descent and distribution of the state where the Optionee was domiciled at the
date of death.

5. No Rights as Shareholder. Neither the Optionee nor any person claiming under or through
the Optionee shall be or have any rights or privileges of a shareholder of the Company in respect
of any of the shares issuable upon the exercise of this Option, unless and until certificates
representing such shares shall have been issued (as evidenced by the appropriate entry on the books
of the Company or of a duly authorized transfer agent of the Company).

6. State and Federal Securities Regulation. No shares shall be issued by the Company upon
the exercise of this Option unless and until any then-applicable requirements of state and federal
laws and regulatory agencies shall have been fully complied with to the satisfaction of the Company
and its counsel. The Company may suspend for a reasonable period or periods the time during which
this Option may be exercised if, in the opinion of the Company, such suspension is required to
enable the Company to remain in compliance with regulatory requirements relating to the issuance of
shares of Common Stock subject to this Option. This Option is subject to the requirement that, if
at any time the Company shall determine, in its discretion, that the listing, registration or
qualification of the shares of common stock subject to this Option upon any securities exchange or
under any state or federal law, or the consent or approval of any government regulatory body, is
necessary or desirable as a condition of, or in connection with, the granting or exercise of this
Option or the issue or purchase of shares under this Option, this Option may not be exercised in
whole or in part until such listing, registration, qualification, consent or approval shall have
been effected or obtained free of any conditions not acceptable to the Company. The Company shall
be under no obligation to effect or obtain any such listing, registration, qualification, consent
or approval if the Company shall determine, in its discretion, that such action would not be in the
best interest of the Company. The Company shall not be liable for damages due to a delay in the
delivery or issuance of any stock certificates for any reason whatsoever, including, but not
limited to, a delay caused by listing, registration or

	 	 
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qualification of the shares of Common Stock
subject to an option upon any securities exchange or under any federal or state law or the
effecting or obtaining of any consent or approval of any
governmental body with respect to the granting or exercise of this Option or the issue or purchase
of shares under this Option.

7. Modification of Options. At any time and from time-to-time the Committee may execute an
instrument providing for modification, extension, or renewal of any outstanding option, provided
that no such modification, extension or renewal shall impair this Option in any respect without the
written consent of the holder of this Option.

8. Withholding of Taxes. The Company may make such provisions and take such steps as it
may deem necessary or appropriate for the withholding of any taxes which the Company or any
Subsidiary is required by any law or regulation of any governmental authority, whether federal,
state or local, domestic or foreign, to withhold in connection with any option, including, but not
limited to, the withholding of the issuance of all or any portion of the shares of Common Stock
subject to this Option until the Optionee reimburses the Company or the applicable Subsidiary for
the amount the Company or the applicable Subsidiary is required to withhold with respect to such
taxes, canceling any portion of the issuance in an amount sufficient to reimburse the Company or
the applicable Subsidiary for the amount it is required to so withhold, or taking any other action
reasonably required to satisfy the withholding obligation of the Company or the applicable
Subsidiary.

9. Continued Employment Not Presumed. Nothing in this Agreement, the Plan or any document
describing it nor the grant of an option shall give the Optionee the right to continue in
employment with the Company or any of its Subsidiaries or affect the right of the Company or a
Subsidiary to terminate the employment of the Optionee with or without cause.

10. Non-Competition Covenants.

     a. The provisions of this subparagraph a. shall apply both during normal working hours and at
all other times including, but not limited to, nights, weekends and vacation time, while Optionee
is employed by the Company or any Subsidiary. Optionee shall not directly or indirectly (i) engage
in any employment, business, or activity that is competitive with the business of the Company or
any Subsidiary, (ii) assist any other person or organization in competing with, or in preparing to
engage in competition with, the business of the Company or any Subsidiary. Direct competition shall
include, but not be limited to, the design, development, production, promotion or sale of products,
software, or services competitive with those of the Company or any Subsidiary. In addition,
Optionee shall not directly or indirectly (i) engage in any employment, business, or activity that
is competitive with either (A) the proposed business of the Subsidiary that employs
Optionee (“Employing Subsidiary”) or (B) any proposed business of any of the Company’s other
Subsidiaries (the “Non-Employing Subsidiaries”) of which Optionee has actual knowledge, or (ii)
assist any other person or organization in competing with, or in preparing to engage in competition
with, either (A) the proposed business of the Employing Subsidiary or (B) any proposed
business of any Non-Employing Subsidiary of which Optionee has actual knowledge.

	 	 
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     b. The provisions of this subparagraph b. shall apply during Optionee’s employment with the
Company or any Subsidiary and for a period of six months after Optionee ceases to be employed by
the Company or any Subsidiary. Optionee shall not directly or indirectly solicit to conduct any
Competitive Business with, or conduct any Competitive Business with, any (i) then-current customer
of the Employing Subsidiary or (ii) any person that has been a customer of the Employing Subsidiary
within the six months prior to the time of Optionee’s separation from employment. The phrase
“Competitive Business” means the line(s) of business(es) conducted by the Employing Subsidiary.

     c. The provisions of this subparagraph c. shall apply during Optionee’s employment with the
Company or any Subsidiary and for a period of 12 months after Optionee’s separation from
employment. Optionee shall not directly or indirectly solicit to hire, or cause to be hired, any
employee of the Company or any Subsidiary as an employee or agent of, or consultant to, any
business enterprise that Optionee is associated with.

     d. Each non-competition covenant of Optionee contained in the preceding provisions of this
Paragraph 10 (the “non-competition covenant”) shall be construed as an agreement independent of any
other provision of this Agreement and the existence of any claim or cause of action of Optionee
against the Company or any Subsidiary, whether predicated on this Agreement or otherwise, shall not
constitute a defense to the enforcement by the Company or any Subsidiary of such non-competition
covenant.

     e. The Company and Optionee have in good faith used their best efforts to make each
non-competition covenant contained in the preceding provisions of this Paragraph 10 reasonable in
both scope and in duration. It is not anticipated, nor is it intended, by either party to this
Agreement that any court or other tribunal having jurisdiction over the matter will find it
necessary to reform any non-competition covenant to make it reasonable in both scope and in
duration, or otherwise. If any non-competition covenant is deemed by a tribunal having
jurisdiction over the matter to be unlawful or unenforceable, such provision will be deemed
severable from this Agreement and such provision will be limited or eliminated to the minimum
extent necessary so that the remaining provisions of this Agreement shall otherwise remain in full
force and effect and be enforceable. Furthermore, in lieu of such unlawful or unenforceable
provision, there shall be added automatically as part of this Agreement a provision as similar in
terms as may be possible and be enforceable.

     f. Optionee is agreeing to the provisions of this Paragraph 10 in consideration of the grant
of this Option. The provisions of this Paragraph 10 shall be valid and enforceable by the Company
and its Subsidiaries, regardless of whether or not any of this Option granted hereunder actually
becomes exercisable, or whether or not Optionee actually exercises any rights under this Option.
In the event of any conflict or inconsistency between any provision of this Paragraph 10 and any
similar or analogous provision of any other agreement (either currently in effect or that may be
entered into in the future) between Optionee, on the one hand, and the Company or any Subsidiary,
on the other hand, whichever provision is most favorable to the Company or such Subsidiary shall
govern.

	 	 
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11. Option Issued Pursuant to Plan. This Option is issued pursuant to and subject to the
terms and conditions and the restrictions as set forth in the Plan, and in the event of any
inconsistency, the provisions of the Plan shall govern, provided that no amendment shall be made to
the Plan subsequent to the date hereof that impairs the Optionee’s rights under this Option without
the Optionee’s written consent.

12. No Liability of Option. This Option is not liable for or subject to, in whole or in
part, the debts, contracts, liabilities or torts of the Optionee nor shall it be subject to
garnishment, attachment, execution, levy or other legal or equitable process.

13. No Assignment. This Option is not transferable otherwise than by will or the laws of
descent and distribution, and is exercisable during the Optionee’s lifetime only by Optionee.
Without limiting the generality of the foregoing, this Option may not be assigned, transferred
(except as aforesaid), pledged or hypothecated in any way (whether by operation of law or
otherwise), and shall not be subject to execution, attachment, or similar process, without the
prior written consent of the Company. Any attempted assignment, transfer, pledge, or hypothecation
contrary to the provisions hereof shall be void and ineffective for all purposes.

14. Governing Law. This Agreement has been executed in, and shall be deemed to be
performable in, Dallas, Dallas County, Texas. The parties agree that this Agreement shall be
governed by and construed in accordance with the laws of the State of Texas (excluding its conflict
of laws rules). The parties further agree that the courts of the State of Texas, and any courts
whose jurisdiction is derivative on the jurisdiction of the courts of the State of Texas, shall
have personal jurisdiction over all parties to this Agreement.

15. Entire Agreement. By signing the Signature Page, the Optionee agrees to the terms of
this Option. Except for the Plan, this Agreement constitutes the entire agreement between the
parties pertaining to the subject matter hereof and supersedes all prior and contemporaneous
agreements, representations and understandings of the parties. No supplement, modification or
amendment of this Agreement shall be binding unless executed in writing by the party to be charged
therewith. No waiver of any of the provisions of this Agreement shall be deemed, or shall
constitute a waiver of any other provision, whether or not similar, nor shall any waiver constitute
a continuing waiver.

16. Notice. Other than any Exercise Notice, any notice required or permitted to be given
under the Plan or this Agreement shall be in writing and delivered in person or sent by registered
or certified mail, return receipt requested, first-class postage prepaid, (i) if to the Optionee,
at the address shown on the books and records of the Company or at the Optionee’s place of
employment, or (ii) if to the Company, at 2711 N. Haskell Avenue, Suite 2300, LB 36, Dallas, Texas
75204-2960: Attention: Treasurer, or any other address that may be given by either party

	 	 
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to the other party by notice pursuant to this Paragraph. Any notice other than any Exercise
Notice, if sent by registered or certified mail, shall be deemed to have been given when received.

	 	 	 	 	 
	 	ZIX CORPORATION

 	 
	 	By:  	/s/ Bradley C. Almond
 	 
	 	 	Bradley C. Almond 	 
	 	 	Vice President, Chief Financial

Officer and Treasurer 	 

	 	 
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Signature Page

To

Zix Corporation Stock Option Agreement

	 	 	 
	Effective Date of Grant:

	 	                                                                                
	 
	 	 
	Name of Optionee:

	 	                                                                                
	 
	 	 
	No. of Shares:

	 	                                                                                
	 
	 	 
	Exercise Price:

	 	                                                                                
	 
	 	 
	Name of Plan:

	 	                                                                                
	 
	 	 
	Expiration Date:

	 	                                                                                
	 
	 	 
	Vesting Schedule:

	 	 

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Date Upon Which Right	 
	Number of Shares	 	 	 	 	 	To Purchase Accrues	 

 

 

	 	 	 	 	 	 	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	 	 	 	Date:	 	 
	 

	 	 	 	 	 	 
	Optionee Signature
	 	 	 	 	 	 

Sign and return to:

Zix Corporation, 2711 N. Haskell Avenue, Suite 2200, Dallas, Texas 75204-2960

Attn: Legal Department<PAGE>
                                                                    Exhibit 10.1

                          ALNYLAM PHARMACEUTICALS, INC.

                       Nonstatutory Stock Option Agreement
                     Granted Under 2004 Stock Incentive Plan

1.    Grant of Option.

      This agreement evidences the grant by Alnylam Pharmaceuticals, Inc., a
Delaware corporation (the "Company"), on          , 20[  ] (the "Grant Date") to
[ ], an [employee], [consultant], [director] of the Company (the "Participant"),
of an option to purchase, in whole or in part, on the terms provided herein and
in the Company's 2004 Stock Incentive Plan (the "Plan"), a total of [ ] shares
(the "Shares") of common stock, $.01 par value per share, of the Company
("Common Stock") at $[ ] per Share. Unless earlier terminated, this option shall
expire at 5:00 p.m., Eastern time, on [the date that is ten years from the Grant
Date] (the "Final Exercise Date").

      It is intended that the option evidenced by this agreement shall not be an
incentive stock option as defined in Section 422 of the Internal Revenue Code of
1986, as amended, and any regulations promulgated thereunder (the "Code").
Except as otherwise indicated by the context, the term "Participant", as used in
this option, shall be deemed to include any person who acquires the right to
exercise this option validly under its terms.

2.    Vesting Schedule.

      This option will become exercisable ("vest") as to [                    ].

      The right of exercise shall be cumulative so that to the extent the option
is not exercised in any period to the maximum extent permissible it shall
continue to be exercisable, in whole or in part, with respect to all Shares for
which it is vested until the earlier of the Final Exercise Date or the
termination of this option under Section 3 hereof or the Plan.

3.    Exercise of Option.

      (a) Form of Exercise. Each election to exercise this option shall be in
writing, signed by the Participant, and received by the Company at its principal
office, accompanied by this agreement, and payment in full in the manner
provided in the Plan. The Participant may purchase less than the number of
shares covered hereby, provided that no partial exercise of this option may be
for any fractional share or for fewer than ten whole shares.

      (b) Continuous Relationship with the Company Required. Except as otherwise
provided in this Section 3, this option may not be exercised unless the
Participant, at the time he or she exercises this option, is, and has been at
all times since the Grant Date, an [employee or officer of], or consultant or
advisor to, the Company or any other entity the employees, officers, directors,
consultants, or advisors of which are eligible to receive option grants under
the Plan (an "Eligible Participant").

<PAGE>

      (c) Termination of Relationship with the Company. If the Participant
ceases to be an Eligible Participant for any reason, then, except as provided in
paragraphs (d) and (e) below, the right to exercise this option shall terminate
three months after such cessation (but in no event after the Final Exercise
Date), provided that this option shall be exercisable only to the extent that
the Participant was entitled to exercise this option on the date of such
cessation. Notwithstanding the foregoing, if the Participant, prior to the Final
Exercise Date, violates the non-competition or confidentiality provisions of any
employment contract, confidentiality and nondisclosure agreement or other
agreement between the Participant and the Company, the right to exercise this
option shall terminate immediately upon such violation.

      (d) Exercise Period Upon Death or Disability. If the Participant dies or
becomes disabled (within the meaning of Section 22(e)(3) of the Code) prior to
the Final Exercise Date while he or she is an Eligible Participant and the
Company has not terminated such relationship for "cause" as specified in
paragraph (e) below, this option shall be exercisable, within the period of one
year following the date of death or disability of the Participant, by the
Participant (or in the case of death by an authorized transferee), provided that
this option shall be exercisable only to the extent that this option was
exercisable by the Participant on the date of his or her death or disability,
and further provided that this option shall not be exercisable after the Final
Exercise Date.

      (e) Discharge for Cause. If the Participant, prior to the Final Exercise
Date, is discharged by the Company for "cause" (as defined below), the right to
exercise this option shall terminate immediately upon the effective date of such
discharge. "Cause" shall mean willful misconduct by the Participant or willful
failure by the Participant to perform his or her responsibilities to the Company
(including, without limitation, breach by the Participant of any provision of
any employment, consulting, advisory, nondisclosure, non-competition or other
similar agreement between the Participant and the Company), as determined by the
Company, which determination shall be conclusive. The Participant shall be
considered to have been discharged for "Cause" if the Company determines, within
30 days after the Participant's resignation, that discharge for cause was
warranted.

4.    Withholding.

      No Shares will be issued pursuant to the exercise of this option unless
and until the Participant pays to the Company, or makes provision satisfactory
to the Company for payment of, any federal, state or local withholding taxes
required by law to be withheld in respect of this option.

5.    Transferability of Option.

      The Participant shall not sell, assign, transfer, pledge, hypothecate or
otherwise dispose of, by operation of law or otherwise, this option, or any
interest herein, except that the Participant may transfer this option, without
consideration, to or for the benefit of the Participant's spouse, children,
parents, uncles, aunts, siblings, grandchildren and any other relatives approved
by the Board of Directors (collectively, "Approved Relatives") or to a trust
established solely for the benefit of the Participant and/or Approved Relatives,
provided that such option shall remain subject to this agreement.

                                      -2-
<PAGE>

6.    Provisions of the Plan.

      This option is subject to the provisions of the Plan, a copy of which is
furnished to the Participant with this option.

      IN WITNESS WHEREOF, the Company has caused this option to be executed
under its corporate seal by its duly authorized officer. This option shall take
effect as a sealed instrument.

                                        ALNYLAM PHARMACEUTICALS, INC.

Dated: _________                        By:  _________________________________
                                             Name:  __________________________
                                             Title: __________________________

                                      -3-
<PAGE>

                            PARTICIPANT'S ACCEPTANCE

      The undersigned hereby accepts the foregoing option and agrees to the
terms and conditions thereof. The undersigned hereby acknowledges receipt of a
copy of the Company's 2004 Stock Incentive Plan.

                                        PARTICIPANT:

                                        ________________________________________

                                        Address: _______________________________
                                                 _______________________________

                                      -4-

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