Exhibit 10.2

 

 

MARINA BIOTECH, INC.

 

2014 LONG-TERM INCENTIVE PLAN

 

* * * * *

 

1. Purpose.   The purpose of the Marina Biotech, Inc. 2014 Long-Term Incentive
Plan (the “Plan”) is to further and promote the interests of Marina Biotech,
Inc. (the “Company”), its Subsidiaries and its stockholders by enabling the
Company and its Subsidiaries to attract, retain and motivate employees,
directors and consultants, or those who will become employees directors or
consultants, and to align the interests of those individuals and the Company’s
stockholders. To do this, the Plan offers performance-based incentive awards and
equity-based opportunities providing such employees, directors and consultants
with a proprietary interest in maximizing the growth, profitability and overall
success of the Company and its Subsidiaries.

 

2. Definitions.   For purposes of the Plan, the following terms shall have the
meanings set forth below:

 

 2.1 “Award” means an award or grant made to a Participant under Sections 6, 7,
8 and/or 9 of the Plan.

 

 2.2 “Award Agreement” means the agreement executed by a Participant pursuant to
Sections 3.2 and 15.7 of the Plan in connection with the granting of an Award.

 

 2.3 “Board” means the Board of Directors of the Company, as constituted from
time to time.

 

 2.4 “Code” means the Internal Revenue Code of 1986, as in effect and as amended
from time to time, or any successor statute thereto, together with any rules,
regulations and interpretations promulgated thereunder or with respect thereto.

 

 2.5 “Committee” means the committee of the Board established to administer the
Plan, as described in Section 3 of the Plan, or if no such committee has been
appointed or established, the Board.

 

 2.6 “Common Stock” means the Common Stock, par value $0.006 per share, of the
Company, or any security of the Company issued by the Company in substitution or
exchange therefor.

 

 2.7 “Company” means Marina Biotech, Inc., a Delaware corporation, or any
successor entity to Marina Biotech, Inc.

 

 2.8 “Exchange Act” means the Securities Exchange Act of 1934, as in effect and
as amended from time to time, or any successor statute thereto, together with
any rules, regulations and interpretations promulgated thereunder or with
respect thereto.

 

 2.9 “Fair Market Value” means on, or with respect to, any given date(s), the
average of the highest and lowest market prices of the Common Stock, as reported
on a public exchange for such date(s) or, if the Common Stock was not traded on
such date(s), on the next preceding day or days on which the Common Stock was
traded. If at any time the Common Stock is not traded on an exchange, the Fair
Market Value of a share of the Common Stock shall be determined in good faith by
the Board.

 

 2.10 “Incentive Stock Option” means any stock option granted pursuant to the
provisions of Section 6 of the Plan (and the relevant Award Agreement) that is
intended to be (and is specifically designated as) an “incentive stock option”
within the meaning of Section 422 of the Code.

 

 2.11 “Non-Qualified Stock Option” means any stock option granted pursuant to
the provisions of Section 6 of the Plan (and the relevant Award Agreement) that
is not (and is specifically designated as not being) an Incentive Stock Option.

 

 2.12 “Participant” means any individual who is selected from time to time under
Section 5 to receive an Award under the Plan.

 

 2.13 “Performance Units” means the monetary units granted under Section 9 of
the Plan and the relevant Award Agreement.

 

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 2.14 “Plan” means the Marina Biotech, Inc. 2014 Long-Term Incentive Plan, as
set forth herein and as in effect and as amended from time to time (together
with any rules and regulations promulgated by the Committee with respect
thereto).

 

 2.15 “Restricted Shares” means the restricted shares of Common Stock granted
pursuant to the provisions of Section 8 of the Plan and the relevant Award
Agreement.

 

 2.16 “Stock Appreciation Right” means an Award described in Section 7.2 of the
Plan and granted pursuant to the provisions of Section 7 of the Plan.

 

 2.17 “Subsidiary(ies)” means any corporation (other than the Company), trust,
partnership or limited liability company in an unbroken chain of entities,
including and beginning with the Company, if each of such entities, other than
the last entity in the unbroken chain, owns, directly or indirectly, more than
fifty percent (50%) of the voting shares, partnership, beneficial or membership
interests in one of the other entities in such chain.

 

3. Administration.

 

 3.1 The Committee.   The Plan shall be administered by the Committee. Subject
to the last sentence of this Section 3.1, the Committee shall be appointed from
time to time by the Board and shall be comprised of not less than two (2) of the
then members of the Board who are Non-Employee Directors (within the meaning of
SEC Rule 16b-3(b)(3)) of the Company and Outside Directors (within the meaning
of Section 162(m) of the Code). Consistent with the Bylaws of the Company,
members of the Committee shall serve at the pleasure of the Board and the Board,
subject to the immediately preceding sentence, may at any time and from time to
time remove members from, or add members to, the Committee. In the event that
the Board has not appointed the Committee, then the Board shall have all the
powers of the Committee under the Plan.

 

 3.2 Plan Administration and Plan Rules.   The Committee is authorized to
construe and interpret the Plan and to promulgate, amend and rescind rules and
regulations relating to the implementation, administration and maintenance of
the Plan. Subject to the terms and conditions of the Plan, the Committee shall
make all determinations necessary or advisable for the implementation,
administration and maintenance of the Plan including, without limitation, (a)
selecting the Plan’s Participants, (b) making Awards in such amounts and form as
the Committee shall determine, (c) imposing such restrictions, terms and
conditions upon such Awards as the Committee shall deem appropriate, and (d)
correcting any technical defect(s) or technical omission(s), or reconciling any
technical inconsistency(ies), in the Plan and/or any Award Agreement. The
Committee may designate persons other than members of the Committee to carry out
the day-to-day ministerial administration of the Plan under such conditions and
limitations as it may prescribe, except that the Committee shall not delegate
its authority with regard to the selection for participation in the Plan and/or
the granting of any Awards to Participants. The Committee’s determinations under
the Plan need not be uniform and may be made selectively among Participants,
whether or not such Participants are similarly situated. Any determination,
decision or action of the Committee in connection with the construction,
interpretation, administration, implementation or maintenance of the Plan shall
be final, conclusive and binding upon all Participants and any person(s)
claiming under or through any Participants. The Company shall effect the
granting of Awards under the Plan, in accordance with the determinations made by
the Committee, by execution of written agreements and/or other instruments in
such form as is approved by the Committee. The Committee may, in its sole
discretion, delegate its authority to one or more senior executive officers for
the purpose of making Awards to Participants who are not subject to Section 16
of the Exchange Act.

 

 3.3 Liability Limitation.   Neither the Board nor the Committee, nor any member
of either, shall be liable for any act, omission, interpretation, construction
or determination made in good faith in connection with the Plan (or any Award
Agreement), and the members of the Board and the Committee shall be entitled to
indemnification and reimbursement by the Company in respect of any claim, loss,
damage or expense (including, without limitation, attorneys’ fees) arising or
resulting therefrom to the fullest extent permitted by law and/or under any
directors and officers liability insurance coverage which may be in effect from
time to time.

 

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4. Term of Plan/Common Stock Subject to Plan.

 

 4.1 Term.   Unless terminated earlier by the Board, the Plan shall terminate on
August 6, 2024, except with respect to Awards then outstanding. After such date
no further Awards shall be granted under the Plan.

 

 4.2 Common Stock.   The maximum number of shares of Common Stock in respect of
which Awards may be granted or paid out under the Plan, subject to adjustment as
provided in Section 13.2 of the Plan, shall not exceed 5,000,000 shares. In the
event of a change in the Common Stock of the Company that is limited to a change
in the designation thereof to “Capital Stock” or other similar designation, or
to a change in the par value thereof, or from par value to no par value, without
increase or decrease in the number of issued shares, the shares resulting from
any such change shall be deemed to be the Common Stock for purposes of the Plan.
Common Stock which may be issued under the Plan may be either authorized and
unissued shares or issued shares which have been reacquired by the Company (in
the open-market or in private transactions) and which are being held as treasury
shares. No fractional shares of Common Stock shall be issued under the Plan.

 

 4.3 Computation of Available Shares.   For the purpose of computing the total
number of shares of Common Stock available for Awards under the Plan, there
shall be counted against the limitations set forth in Section 4.2 of the Plan
the maximum number of shares of Common Stock potentially subject to issuance
upon exercise or settlement of Awards granted under Sections 6 and 7 of the
Plan, the number of shares of Common Stock issued under grants of Restricted
Shares pursuant to Section 8 of the Plan and the maximum number of shares of
Common Stock potentially issuable under grants or payments of Performance Units
pursuant to Section 9 of the Plan, in each case determined as of the date on
which such Awards are granted. If any Awards expire unexercised or are
forfeited, surrendered, cancelled, terminated or settled in cash in lieu of
Common Stock, the shares of Common Stock which were theretofore subject (or
potentially subject) to such Awards shall again be available for Awards under
the Plan to the extent of such expiration, forfeiture, surrender, cancellation,
termination or settlement of such Awards.

 

5. Eligibility.   Individuals eligible for Awards under the Plan shall consist
of employees, directors and consultants, or those who will become employees,
directors or consultants, of the Company and/or its Subsidiaries whose
performance or contribution, in the sole discretion of the Committee, benefits
or will benefit the Company or any Subsidiary.

 

6. Stock Options.

 

 6.1 Terms and Conditions.   Stock options granted under the Plan shall be in
respect of Common Stock and may be in the form of Incentive Stock Options or
Non-Qualified Stock Options (sometimes referred to collectively herein as the
“Stock Option(s)”). Such Stock Options shall be subject to the terms and
conditions set forth in this Section 6 and any additional terms and conditions,
not inconsistent with the express terms and provisions of the Plan, as the
Committee shall set forth in the relevant Award Agreement.

 

 6.2 Grant.   Stock Options may be granted under the Plan in such form as the
Committee may from time to time approve. Stock Options may be granted alone or
in addition to other Awards under the Plan or in tandem with Stock Appreciation
Rights. Special provisions shall apply to Incentive Stock Options granted to any
employee who owns (within the meaning of Section 422(b)(6) of the Code) more
than ten percent (10%) of the total combined voting power of all classes of
stock of the Company or its parent corporation or any subsidiary of the Company,
within the meaning of Sections 424(e) and (f) of the Code (a “10% Shareholder”).

 

 6.3 Exercise Price.   The exercise price per share of Common Stock subject to a
Stock Option shall be determined by the Committee; provided, however, that the
exercise price of a Stock Option shall not be less than one hundred percent
(100%) of the Fair Market Value of the Common Stock on the date of the grant of
such Stock Option; provided, further, however, that, in the case of a 10%
Shareholder, the exercise price of an Incentive Stock Option shall not be less
than one hundred ten percent (110%) of the Fair Market Value of the Common Stock
on the date of grant.

 

 6.4 Term.   The term of each Stock Option shall be such period of time as is
fixed by the Committee; provided, however, that the term of any Incentive Stock
Option shall not exceed ten (10) years (five (5) years, in the case of a 10%
Shareholder) after the date immediately preceding the date on which the
Incentive Stock Option is granted.

 

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 6.5 Method of Exercise.   A Stock Option may be exercised, in whole or in part,
by giving written notice of exercise to the Secretary of the Company, or the
Secretary’s designee, specifying the number of shares to be purchased. Such
notice shall be accompanied by payment in full of the exercise price (and
applicable tax withholding) in cash, by certified check, bank draft, or money
order payable to the order of the Company, or, if permitted by the Committee in
its sole discretion, by delivery of shares of Common Stock satisfying such
requirements as the Committee shall establish, or through such other mechanism
as the Committee shall permit, in its sole discretion. Payment instruments shall
be received by the Company subject to collection. The proceeds received by the
Company upon exercise of any Stock Option may be used by the Company for general
corporate purposes. Any portion of a Stock Option that is exercised may not be
exercised again.

 

 6.6 Tandem Grants.   If Non-Qualified Stock Options and Stock Appreciation
Rights are granted in tandem, as designated in the relevant Award Agreements,
the right of a Participant to exercise any such tandem Stock Option shall
terminate to the extent that the shares of Common Stock subject to such Stock
Option are used to calculate amounts or shares receivable upon the exercise of
the related tandem Stock Appreciation Right.

 

7. Stock Appreciation Rights.

 

 7.1 Terms and Conditions.   The grant of Stock Appreciation Rights under the
Plan shall be subject to the terms and conditions set forth in this Section 7
and any additional terms and conditions, not inconsistent with the express terms
and provisions of the Plan, as the Committee shall set forth in the relevant
Award Agreement.

 

 7.2 Stock Appreciation Rights.   A Stock Appreciation Right is an Award granted
with respect to a specified number of shares of Common Stock entitling a
Participant to receive an amount equal to the excess of the Fair Market Value of
a share of Common Stock on the date of exercise over the Fair Market Value of a
share of Common Stock on the date of grant of the Stock Appreciation Right,
multiplied by the number of shares of Common Stock with respect to which the
Stock Appreciation Right shall have been exercised.

 

 7.3 Grant.   A Stock Appreciation Right may be granted in addition to any other
Award under the Plan or in tandem with or independent of a Non-Qualified Stock
Option.

 

 7.4 Date of Exercisability.   In respect of any Stock Appreciation Right
granted under the Plan, unless otherwise (a) determined by the Committee (in its
sole discretion) at any time and from time to time in respect of any such Stock
Appreciation Right, or (b) provided in the Award Agreement, a Stock Appreciation
Right may be exercised by a Participant, in accordance with and subject to all
of the procedures established by the Committee, in whole or in part at any time
and from time to time during its specified term. The Committee may also provide,
as set forth in the relevant Award Agreement and without limitation, that some
Stock Appreciation Rights shall be automatically exercised and settled on one or
more fixed dates specified therein by the Committee.

 

 7.5 Form of Payment.   Upon exercise of a Stock Appreciation Right, payment may
be made in cash, in Restricted Shares or in shares of unrestricted Common Stock,
or in any combination thereof, as the Committee, in its sole discretion, shall
determine and provide in the relevant Award Agreement.

 

 7.6 Tandem Grant.   The right of a Participant to exercise a tandem Stock
Appreciation Right shall terminate to the extent such Participant exercises the
Non-Qualified Stock Option to which such Stock Appreciation Right is related.

 

8. Restricted Shares.

 

 8.1 Terms and Conditions.   Grants of Restricted Shares shall be subject to the
terms and conditions set forth in this Section 8 and any additional terms and
conditions, not inconsistent with the express terms and provisions of the Plan,
as the Committee shall set forth in the relevant Award Agreement. Restricted
Shares may be granted alone or in addition to any other Awards under the Plan.
Subject to the terms of the Plan, the Committee shall determine the number of
Restricted Shares to be granted to a Participant and the Committee may provide
or impose different terms and conditions on any particular Restricted Share
grant made to any Participant. With respect to each Participant receiving an
Award of Restricted Shares, there shall be issued a stock certificate (or
certificates) in respect of such Restricted Shares. Such stock

 

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certificate(s) shall be registered in the name of such Participant, shall be
accompanied by a stock power duly executed by such Participant, and shall bear,
among other required legends, the following legend:

 

“The transferability of this certificate and the shares of stock represented
hereby are subject to the terms and conditions (including, without limitation,
forfeiture events) contained in the Marina Biotech, Inc. 2014 Long-Term
Incentive Plan and an Award Agreement entered into between the registered owner
hereof and Marina Biotech, Inc. Copies of such Plan and Award Agreement are on
file in the office of the Secretary of Marina Biotech, Inc. Marina Biotech, Inc.
will furnish to the recordholder of the certificate, without charge and upon
written request at its principal place of business, a copy of such Plan and
Award Agreement. Marina Biotech, Inc. reserves the right to refuse to record the
transfer of this certificate until all such restrictions are satisfied, all such
terms are complied with and all such conditions are satisfied.”

 

Such stock certificate evidencing such shares shall, in the sole discretion of
the Committee, be deposited with and held in custody by the Company until the
restrictions thereon shall have lapsed and all of the terms and conditions
applicable to such grant shall have been satisfied.

 

 8.2 Restricted Share Grants.   A grant of Restricted Shares is an Award of
shares of Common Stock granted to a Participant, subject to such restrictions,
terms and conditions as the Committee deems appropriate, including, without
limitation, (a) restrictions on the sale, assignment, transfer, hypothecation or
other disposition of such shares, (b) the requirement that the Participant
deposit such shares with the Company while such shares are subject to such
restrictions, and (c) the requirement that such shares be forfeited upon
termination of employment for specified reasons within a specified period of
time or for other reasons (including, without limitation, the failure to achieve
designated performance goals).

 

 8.3 Restriction Period.   In accordance with Sections 8.1 and 8.2 of the Plan
and unless otherwise determined by the Committee (in its sole discretion) at any
time and from time to time, Restricted Shares shall only become unrestricted and
vested in the Participant in accordance with such vesting schedule relating to
such Restricted Shares, if any, as the Committee may establish in the relevant
Award Agreement (the “Restriction Period”). During the Restriction Period, such
stock shall be and remain unvested and a Participant may not sell, assign,
transfer, pledge, encumber or otherwise dispose of or hypothecate such Award.
Upon satisfaction of the vesting schedule and any other applicable restrictions,
terms and conditions, the Participant shall be entitled to receive payment of
the Restricted Shares or a portion thereof, as the case may be, as provided in
Section 8.4 of the Plan.

 

 8.4 Payment of Restricted Share Grants.   After the satisfaction and/or lapse
of the restrictions, terms and conditions established by the Committee in
respect of a grant of Restricted Shares, a new certificate, without the legend
set forth in Section 8.1 of the Plan, for the number of shares of Common Stock
which are no longer subject to such restrictions, terms and conditions shall, as
soon as practicable thereafter, be delivered to the Participant, provided that
the removal of such legend is permitted by applicable federal and state
securities laws.

  

 8.5 Shareholder Rights.   A Participant shall have, with respect to the shares
of Common Stock underlying a grant of Restricted Shares, all of the rights of a
shareholder of such stock (except as such rights are limited or restricted under
the Plan or in the relevant Award Agreement). Any stock dividends paid in
respect of unvested Restricted Shares shall be treated as additional Restricted
Shares and shall be subject to the same restrictions and other terms and
conditions that apply to the unvested Restricted Shares in respect of which such
stock dividends are issued.

 

9. Performance Units.

 

 9.1 Terms and Conditions.   Performance Units shall be subject to the terms and
conditions set forth in this Section 9 and any additional terms and conditions,
not inconsistent with the express provisions of the Plan, as the Committee shall
set forth in the relevant Award Agreement.

 

 9.2 Performance Unit Grants.   A Performance Unit is an Award of units (with
each unit representing such monetary amount as is designated by the Committee in
the Award Agreement) granted to a Participant, subject to such terms and
conditions as the Committee deems appropriate, including, without limitation,
the requirement that the Participant forfeit such units (or a portion thereof)
in the event certain performance criteria or other conditions are not met within
a designated period of time.

 

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 9.3 Grants.   Performance Units may be granted alone or in addition to any
other Awards under the Plan. Subject to the terms of the Plan, the Committee
shall determine the number of Performance Units to be granted to a Participant
and the Committee may impose different terms and conditions on any particular
Performance Units granted to any Participant.

 

 9.4 Performance Goals and Performance Periods.   Participants receiving a grant
of Performance Units shall only earn into and be entitled to payment in respect
of such Awards if the Company and/or the Participant achieves certain
performance goals (the “Performance Goals”) during and in respect of a
designated performance period (the “Performance Period”). The Performance Goals
and the Performance Period shall be established by the Committee, in its sole
discretion. The Committee shall establish Performance Goals for each Performance
Period prior to, or as soon as practicable after, the commencement of such
Performance Period. The Committee shall also establish a schedule or schedules
for Performance Units setting forth the portion of the Award which will be
earned or forfeited based on the degree of achievement, or lack thereof, of the
Performance Goals at the end of the relevant Performance Period. In setting
Performance Goals, the Committee may use, but shall not be limited to, such
measures as total shareholder return, return on equity, net earnings growth,
sales or revenue growth, cash flow, comparisons to peer companies, individual or
aggregate Participant performance or such other measure or measures of
performance as the Committee, in its sole discretion, may deem appropriate. Such
performance measures shall be defined as to their respective components and
meaning by the Committee (in its sole discretion). During any Performance
Period, the Committee shall have the authority to adjust the Performance Goals
and/or the Performance Period in such manner as the Committee, in its sole
discretion, deems appropriate at any time and from time to time.

 

 9.5 Payment of Units.   With respect to each Performance Unit, the Participant
shall, if the applicable Performance Goals have been achieved, or partially
achieved, as determined by the Committee in its sole discretion, by the Company
and/or the Participant during the relevant Performance Period, be entitled to
receive payment in an amount equal to the designated value of each Performance
Unit times the number of such units so earned. Payment in settlement of earned
Performance Units shall be made as soon as practicable following the conclusion
of the respective Performance Period in cash, in unrestricted Common Stock, or
in Restricted Shares, or in any combination thereof, as the Committee, in its
sole discretion, shall determine and provide in the relevant Award Agreement.

 

10. Other Provisions.

 

 10.1 Performance-Based Awards.   Performance Units, Restricted Shares, and
other Awards subject to performance criteria that are intended to be “qualified
performance-based compensation” within the meaning of section 162(m) of the Code
shall be paid solely on account of the attainment of one or more
pre-established, objective performance goals within the meaning of section
162(m) and the regulations thereunder. Until otherwise determined by the
Committee, the performance goals shall be the attainment of pre-established
levels of any of net income, market price per share, earnings per share, return
on equity, return on capital employed and/or cash flow, regulatory approval of
products, strategic alliances and joint ventures and patent issuances. The
payout of any such Award to a Covered Employee may be reduced, but not
increased, based on the degree of attainment of other performance criteria or
otherwise at the discretion of the Committee. For purposes of the Plan, “Covered
Employee” has the same meaning as set forth in Section 162(m) of the Code.

 

 10.2 Maximum Yearly Awards.   The maximum annual Common Stock amounts in this
Section 10.2 are subject to adjustment under Section 13.2 and are subject to the
Plan maximum under Section 4.2.

 

 10.2.1 Performance-Based Awards.   The maximum amount payable in respect of
Performance Units, performance-based Restricted Shares and other Awards in any
calendar year may not exceed 1,000,000 shares of Common Stock (or the then
equivalent Fair Market Value thereof) in the case of any individual Participant.

 

 10.2.2   Stock Options and SARs.   Each individual Participant may not receive
in any calendar year Awards of Options or Stock Appreciation Rights exceeding
1,000,000 underlying shares of Common Stock.

 

11. Dividend Equivalents.   In addition to the provisions of Section 8.5 of the
Plan, Awards of Stock Options, and/or Stock Appreciation Rights, may, in the
sole discretion of the Committee and if provided

 

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for in the relevant Award Agreement, earn dividend equivalents. In respect of
any such Award which is outstanding on a dividend record date for Common Stock,
the Participant shall be credited with an amount equal to the amount of cash or
stock dividends that would have been paid on the shares of Common Stock covered
by such Award had such covered shares been issued and outstanding on such
dividend record date. The Committee shall establish such rules and procedures
governing the crediting of such dividend equivalents, including, without
limitation, the amount, timing, form of payment and payment contingencies and/or
restrictions of such dividend equivalents, as it deems appropriate or necessary.

 

12. Non-transferability of Awards.   Unless otherwise provided in the Award
Agreement, no Award under the Plan or any Award Agreement, and no rights or
interests herein or therein, shall or may be assigned, transferred, sold,
exchanged, encumbered, pledged, or otherwise hypothecated or disposed of by a
Participant or any beneficiary(ies) of any Participant, except by testamentary
disposition by the Participant or the laws of intestate succession. No such
interest shall be subject to execution, attachment or similar legal process,
including, without limitation, seizure for the payment of the Participant’s
debts, judgments, alimony, or separate maintenance. Unless otherwise provided in
the Award Agreement, during the lifetime of a Participant, Stock Options and
Stock Appreciation Rights are exercisable only by the Participant.

 

13. Changes in Capitalization and Other Matters.  

 

 13.1 No Corporate Action Restriction.   The existence of the Plan, any Award
Agreement and/or the Awards granted hereunder shall not limit, affect or
restrict in any way the right or power of the Board or the stockholders of the
Company to make or authorize (a) any adjustment, recapitalization,
reorganization or other change in the Company’s or any Subsidiary’s capital
structure or its business, (b) any merger, consolidation or change in the
ownership of the Company or any Subsidiary, (c) any issue of bonds, debentures,
capital, preferred or prior preference stocks ahead of or affecting the
Company’s or any Subsidiary’s capital stock or the rights thereof, (d) any
dissolution or liquidation of the Company or any Subsidiary, (e) any sale or
transfer of all or any part of the Company’s or any Subsidiary’s assets or
business, or (f) any other corporate act or proceeding by the Company or any
Subsidiary. No Participant, beneficiary or any other person shall have any claim
against any member of the Board or the Committee, the Company or any Subsidiary,
or any employees, officers, shareholders or agents of the Company or any
subsidiary, as a result of any such action.

 

 13.2 Recapitalization Adjustments.   In the event that the Board determines
that any dividend or other distribution (whether in the form of cash, Common
Stock, other securities, or other property), recapitalization, stock split,
reverse stock split, reorganization, merger, consolidation, split-up, spin-off,
combination, repurchase, or exchange of Common Stock or other securities of the
Company, or other corporate transaction or event affects the Common Stock such
that an adjustment is determined by the Board, in its sole discretion, to be
necessary or appropriate in order to prevent dilution or enlargement of benefits
or potential benefits intended to be made available under the Plan, the Board
may, in such manner as it in good faith deems equitable, adjust any or all of
(i) the number of shares of Common Stock or other securities of the Company (or
number and kind of other securities or property) with respect to which Awards
may be granted, (ii) the number of shares of Common Stock or other securities of
the Company (or number and kind of other securities or property) subject to
outstanding Awards, and (iii) the exercise price with respect to any Stock
Option, or make provision for an immediate cash payment to the holder of an
outstanding Award in consideration for the cancellation of such Award.

 

 13.3 Mergers.   If the Company enters into or is involved in any merger,
reorganization, recapitalization, sale of all or substantially all of the
Company’s assets, liquidation, or business combination with any person or entity
(such merger, reorganization, recapitalization, sale of all or substantially all
of the Company’s assets, liquidation, or business combination to be referred to
herein as a “Merger Event”), the Board may take such action as it deems
appropriate, including, but not limited to, replacing such Stock Options with
substitute stock options and/or stock appreciation rights in respect of the
shares, other securities or other property of the surviving corporation or any
affiliate of the surviving corporation on such terms and conditions, as to the
number of shares, pricing and otherwise, which shall substantially preserve the
value, rights and benefits of any affected Stock Options or Stock Appreciation
Rights granted hereunder as of the date of the consummation of the Merger Event.
Notwithstanding anything to the contrary in the Plan, if any Merger Event
occurs, the Company shall have the right, but not the obligation, to cancel each
Participant’s Stock Options and/or Stock Appreciation Rights and to pay to each
affected

 

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Participant in connection with the cancellation of such Participant’s Stock
Options and/or Stock Appreciation Rights, an amount equal to the excess of the
Fair Market Value, as determined by the Board, of the Common Stock underlying
any unexercised Stock Options or Stock Appreciation Rights (whether then
exercisable or not) over the aggregate exercise price of such unexercised Stock
Options and/or Stock Appreciation Rights.

 

Upon receipt by any affected Participant of any such substitute stock options,
stock appreciation rights (or payment) as a result of any such Merger Event,
such Participant’s affected Stock Options and/or Stock Appreciation Rights for
which such substitute options and/or stock appreciation rights (or payment) were
received shall be thereupon cancelled without the need for obtaining the consent
of any such affected Participant.

 

14. Amendment, Suspension and Termination.   

 

 14.1 In General.   The Board may suspend or terminate the Plan (or any portion
thereof) at any time and may amend the Plan at any time and from time to time in
such respects as the Board may deem advisable to insure that any and all Awards
conform to or otherwise reflect any change in applicable laws or regulations, or
to permit the Company or the Participants to benefit from any change in
applicable laws or regulations, or in any other respect the Board may deem to be
in the best interests of the Company or any Subsidiary. No such amendment,
suspension or termination shall (x) materially adversely affect the rights of
any Participant under any outstanding Stock Options, Stock Appreciation Rights,
Performance Units, or Restricted Share grants, without the consent of such
Participant, or (y) increase the number of shares available for Awards pursuant
to Section 4.2 or increase the Maximum Yearly Awards under Section 10.2 or
change the performance criteria listed in Section 10.1, without shareholder
approval; provided, however, that the Board may amend the Plan, without the
consent of any Participants, in any way it deems appropriate to satisfy Code
Section 409A and any regulations or other authority promulgated thereunder,
including any amendment to the Plan to cause certain Awards not to be subject to
Code Section 409A.

 

 14.2 Award Agreement Modifications.   The Committee may (in its sole
discretion) amend or modify at any time and from time to time the terms and
provisions of any outstanding Stock Options, Stock Appreciation Rights,
Performance Units, or Restricted Share grants, in any manner to the extent that
the Committee under the Plan or any Award Agreement could have initially
determined the restrictions, terms and provisions of such Stock Options, Stock
Appreciation Rights, Performance Units, and/or Restricted Share grants,
including, without limitation, changing or accelerating (a) the date or dates as
of which such Stock Options or Stock Appreciation Rights shall become
exercisable, (b) the date or dates as of which such Restricted Share grants
shall become vested, or (c) the performance period or goals in respect of any
Performance Units. No such amendment or modification shall, however, materially
adversely affect the rights of any Participant under any such Award without the
consent of such Participant; provided, however, that the Committee may amend an
Award without the consent of the Participant, in any way it deems appropriate to
satisfy Code Section 409A and any regulations or other authority promulgated
thereunder, including any amendment to or modification of such Award to cause
such Award not to be subject to Code Section 409A.

 

15. Miscellaneous.   

 

 15.1 Tax Withholding.   The Company shall have the right to deduct from any
payment or settlement under the Plan, including, without limitation, the
exercise of any Stock Option or Stock Appreciation Right, or the delivery,
transfer or vesting of any Common Stock or Restricted Shares, any federal,
state, local or other taxes of any kind which the Committee, in its sole
discretion, deems necessary to be withheld to comply with the Code and/or any
other applicable law, rule or regulation. Shares of Common Stock may be used to
satisfy any such tax withholding. Such Common Stock shall be valued based on the
Fair Market Value of such stock as of the date the tax withholding is required
to be made, such date to be determined by the Committee. In addition, the
Company shall have the right to require payment from a Participant to cover any
applicable withholding or other employment taxes due upon any payment or
settlement under the Plan.

 

 15.2 No Right to Employment.   Neither the adoption of the Plan, the granting
of any Award, nor the execution of any Award Agreement, shall confer upon any
employee of the Company or any Subsidiary any right to continued employment with
the Company or any Subsidiary, as the case may be, nor shall it

 

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interfere in any way with the right, if any, of the Company or any Subsidiary to
terminate the employment of any employee at any time for any reason.

 

 15.3 Unfunded Plan.   The Plan shall be unfunded and the Company shall not be
required to segregate any assets in connection with any Awards under the Plan.
Any liability of the Company to any person with respect to any Award under the
Plan or any Award Agreement shall be based solely upon the contractual
obligations that may be created as a result of the Plan or any such award or
agreement. No such obligation of the Company shall be deemed to be secured by
any pledge of, encumbrance on, or other interest in, any property or asset of
the Company or any Subsidiary. Nothing contained in the Plan or any Award
Agreement shall be construed as creating in respect of any Participant (or
beneficiary thereof or any other person) any equity or other interest of any
kind in any assets of the Company or any Subsidiary or creating a trust of any
kind or a fiduciary relationship of any kind between the Company, any Subsidiary
and/or any such Participant, any beneficiary thereof or any other person.

 

 15.4 Payments to a Trust.   The Committee is authorized to cause to be
established a trust agreement or several trust agreements or similar
arrangements from which the Committee may make payments of amounts due or to
become due to any Participants under the Plan.

 

 15.5 Other Company Benefit and Compensation Programs.   Payments and other
benefits received by a Participant under an Award made pursuant to the Plan
shall not be deemed a part of a Participant’s compensation for purposes of the
determination of benefits under any other employee welfare or benefit plans or
arrangements, if any, provided by the Company or any Subsidiary unless expressly
provided in such other plans or arrangements, or except where the Board
expressly determines in writing that inclusion of an Award or portion of an
Award should be included to accurately reflect competitive compensation
practices or to recognize that an Award has been made in lieu of a portion of
competitive annual base salary or other cash compensation. Awards under the Plan
may be made in addition to, in combination with, or as alternatives to, grants,
awards or payments under any other plans or arrangements of the Company or its
Subsidiaries. The existence of the Plan notwithstanding, the Company or any
Subsidiary may adopt such other compensation plans or programs and additional
compensation arrangements as it deems necessary to attract, retain and motivate
employees.

 

 15.6 Listing, Registration and Other Legal Compliance.   No Awards or shares of
the Common Stock shall be required to be issued or granted under the Plan unless
legal counsel for the Company shall be satisfied that such issuance or grant
will be in compliance with all applicable federal and state securities laws and
regulations and any other applicable laws or regulations. The Committee may
require, as a condition of any payment or share issuance, that certain
agreements, undertakings, representations, certificates, and/or information, as
the Committee may deem necessary or advisable, be executed or provided to the
Company to assure compliance with all such applicable laws or regulations.
Certificates for shares of the Restricted Shares and/or Common Stock delivered
under the Plan may be subject to such stock-transfer orders and such other
restrictions as the Committee may deem advisable under the rules, regulations,
or other requirements of the Securities and Exchange Commission, any stock
exchange upon which the Common Stock is then listed, and any applicable federal
or state securities law. In addition, if, at any time specified herein (or in
any Award Agreement or otherwise) for (a) the making of any Award, or the making
of any determination, (b) the issuance or other distribution of Restricted
Shares and/or Common Stock, or (c) the payment of amounts to or through a
Participant with respect to any Award, any law, rule, regulation or other
requirement of any governmental authority or agency shall require either the
Company, any Subsidiary or any Participant (or any estate, designated
beneficiary or other legal representative thereof) to take any action in
connection with any such determination, any such shares to be issued or
distributed, any such payment, or the making of any such determination, as the
case may be, shall be deferred until such required action is taken. With respect
to persons subject to Section 16 of the Exchange Act, transactions under the
Plan are intended to comply with all applicable conditions of Rule 16b-3
promulgated under the Exchange Act.

 

 15.7 Award Agreements.   Each Participant receiving an Award under the Plan
shall enter into an Award Agreement with the Company in a form specified by the
Committee. Each such Participant shall agree to the restrictions, terms and
conditions of the Award set forth therein and in the Plan.

 

 15.8 Designation of Beneficiary.   Each Participant to whom an Award has been
made under the Plan may designate a beneficiary or beneficiaries to exercise any
option or to receive any payment which

 

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under the terms of the Plan and the relevant Award Agreement may become
exercisable or payable on or after the Participant’s death. At any time, and
from time to time, any such designation may be changed or cancelled by the
Participant without the consent of any such beneficiary. Any such designation,
change or cancellation must be on a form provided for that purpose by the
Committee and shall not be effective until received by the Committee. If no
beneficiary has been designated by a deceased Participant, or if the designated
beneficiaries have predeceased the Participant, the beneficiary shall be the
Participant’s estate. If the Participant designates more than one beneficiary,
any payments under the Plan to such beneficiaries shall be made in equal shares
unless the Participant has expressly designated otherwise, in which case the
payments shall be made in the shares designated by the Participant.

 

 15.9 Leaves of Absence/Transfers.   The Committee shall have the power to
promulgate rules and regulations and to make determinations, as it deems
appropriate, under the Plan in respect of any leave of absence from the Company
or any Subsidiary granted to a Participant. Without limiting the generality of
the foregoing, the Committee may determine whether any such leave of absence
shall be treated as if the Participant has terminated employment with the
Company or any such Subsidiary. If a Participant transfers within the Company,
or to or from any Subsidiary, such Participant shall not be deemed to have
terminated employment as a result of such transfers.

 

 15.10 Code Section 409A.   This Plan and all Awards hereunder are intended to
comply with the requirements of Code Section 409A and any regulations or other
authority promulgated thereunder. Notwithstanding any provision of the Plan or
any Award Agreement to the contrary, the Board and the Committee reserve the
right (without the consent of any Participant and without any obligation to do
so or to indemnify any Participant or the beneficiaries of any Participant for
any failure to do so) to amend this Plan and/or any Award Agreement as and when
necessary or desirable to conform to or otherwise properly reflect any guidance
issued under Code Section 409A after the date hereof without violating Code
Section 409A. In the event that any payment or benefit made hereunder would
constitute payments or benefits pursuant to a non-qualified deferred
compensation plan within the meaning of Code Section 409A and, at the time of a
Participant’s “separation from service”, such Participant is a “specified
employee” within the meaning of Code Section 409A, then any such payments or
benefits shall be delayed until the six-month anniversary of the date of such
Participant’s “separation from service”. Each payment made under this Plan shall
be designated as a “separate payment” within the meaning of Code Section 409A.

 

 15.11 Governing Law.   The Plan and all actions taken thereunder shall be
governed by and construed in accordance with the laws of the State of Delaware,
without reference to the principles of conflict of laws thereof. Any titles and
headings herein are for reference purposes only, and shall in no way limit,
define or otherwise affect the meaning, construction or interpretation of any
provisions of the Plan.

 

 15.12 Effective Date.   The Plan shall be effective upon its approval by the
Board and adoption by the Company, subject to the approval of the Plan by the
Company’s stockholders in accordance with Sections 162(m) and 422 of the Code.

 

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IN WITNESS WHEREOF, this Plan is adopted by the Company on this 6 th day of
August, 2014.

 

 

  MARINA BIOTECH, INC.       By: /s/ J. Michael French   Name: 
Title: J. Michael French
President & CEO

 

 

 

 

 

 

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