ALNYLAM PHARMACEUTICALS, INC.
It is the policy of Alnylam Pharmaceuticals, Inc. (the Company) to require, to the extent determined to be appropriate by the Board of Directors, any Covered Executive who engaged in Misconduct that resulted in a Financial Restatement to repay to the Company, in cash and upon demand, any Excess Proceeds from Incentive Compensation received by the Covered Executive during any Clawback Period. The repayment of Excess Proceeds is in addition to, and not in lieu of, any other relief available to the Company due to the Covered Executives Misconduct. This policy shall be effective December 17, 2014, and apply to Incentive Compensation that is both approved by the Compensation Committee of the Board of Directors and awarded on or after that date.
Clawback Period means the 12-month period following the filing with the Securities and Exchange Commission (the SEC) of any financial statements that subsequently become the subject of a Financial Restatement.
Covered Executive means any officer with the title of Vice President or a more senior title.
Excess Proceeds means any portion of Incentive Compensation paid, granted or distributed to a Covered Executive during a Clawback Period that is greater than the amount that would have been paid, granted or distributed if calculated based on any restated financial results, net of taxes due or paid. In the case of any Incentive Compensation paid in the form of an equity award, Excess Proceeds shall be determined by reference to the sale proceeds of the shares, net of any applicable exercise price and taxes due or paid if the shares have been sold, and in the event the shares have not been sold, the fair market value of the shares recognized in income of the Covered Executive, net of taxes due or paid and in the event the equity award has not become vested, then the non-vested portion of the equity award shall be forfeited.
Financial Restatement means any material restatement, whether required by law or determined by the Board of Directors to be in the best interests of the Company, of financial statements included in a filing by the Company with the SEC because of noncompliance, due to Misconduct, with financial reporting requirements under federal securities laws.
Incentive Compensation means any cash or equity-based compensation if the payment, grant or vesting of such compensation was predicated on the achievement of certain financial results that were subsequently the subject of a Financial Restatement.
Misconduct means an act of embezzlement, fraud, willful misconduct or breach of fiduciary duty, as determined by the Compensation Committee of the Board of Directors or another committee of independent directors and ratified by the Board of Directors.
Implementation rules for the mandatory clawback requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank) have yet to be finalized as of the date of initial adoption of this policy. However, to the extent necessary, this policy will be amended by the Board of Directors to conform with the final Dodd-Frank rules once issued and applicable to the Company.