8-KSecurities & Listing

ALNYLAM PHARMACEUTICALS, INC. 8-K Report, Listing Notice (Jun 29, 2007)

Filed June 29, 2007For Securities:ALNY

Summary

This 8-K filing from Alnylam Pharmaceuticals, Inc. (ALNY) addresses a temporary non-compliance with Nasdaq listing requirements related to audit committee independence. The issue stemmed from a stock option grant made in September 2006 to Paul Schimmel, a member of the Company's audit committee, for his services on the scientific advisory board. Rule 10A-3 of the Securities Exchange Act of 1934 prohibits audit committee members from receiving compensatory fees outside their board duties. Alnylam proactively notified Nasdaq of this issue. Crucially, the Company terminated the stock option grant with Dr. Schimmel's consent on June 11, 2007, before any shares vested. As a result of this corrective action, Nasdaq notified Alnylam on June 26, 2007, that the Company had regained compliance with the listing rules. No changes to the audit committee composition were required.

Key Highlights

  • 1Alnylam Pharmaceuticals received a notice from Nasdaq regarding a temporary non-compliance with audit committee independence rules.
  • 2The non-compliance arose from a stock option grant to audit committee member Paul Schimmel for services outside his audit committee role.
  • 3The Company promptly terminated the stock option grant before any shares vested, addressing the issue.
  • 4Nasdaq confirmed that Alnylam has regained compliance with listing rules.
  • 5No changes to the composition of the audit committee were mandated by Nasdaq.
  • 6The incident highlights the importance of strict adherence to SEC and Nasdaq independence rules for listed companies.

Frequently Asked Questions

Alnylam granted a stock option to Paul Schimmel, a member of its audit committee, for services rendered to the scientific advisory board. This action violated Rule 10A-3 of the Securities Exchange Act, which prohibits audit committee members from receiving compensatory fees outside their board capacity, and consequently breached Nasdaq's independence requirements.

No, Alnylam did not lose its Nasdaq listing. The company proactively addressed the non-compliance by terminating the stock option grant. Nasdaq confirmed that this corrective action allowed Alnylam to regain compliance with its listing rules.

No, Nasdaq did not require Alnylam to make any changes to the composition of its audit committee. The Company's swift action to rectify the situation was sufficient to maintain its compliance.

The stock option grant was made in September 2006 and was terminated on June 11, 2007, before any shares vested. Nasdaq notified Alnylam of the compliance issue on June 26, 2007.