Exhibit 10.1


 





Phio
Pharmaceuticals Corp.


2012 LONG TERM
INCENTIVE PLAN


 


1. DEFINED TERMS


 


Exhibit A, which is incorporated by
reference, defines the terms used in the Plan and sets forth certain operational rules related to those terms.


 


2. PURPOSE


 


The Plan has been established to advance
the interests of the Company by providing for the grant to Participants of Stock-based incentive Awards and other Awards.


 


3. ADMINISTRATION


 


The Administrator has discretionary
authority, subject only to the express provisions of the Plan, to interpret the Plan; determine eligibility for and grant Awards;
determine, modify or waive the terms and conditions of any Award; prescribe forms, rules and procedures; and otherwise do all things
necessary to carry out the purposes of the Plan. Determinations of the Administrator made under the Plan will be conclusive and
will bind all parties.


 


4. LIMITS ON AWARDS UNDER THE PLAN


 


(a) Number of Shares. The
maximum number of shares of Stock that may be delivered upon satisfaction of Equity Awards under the Plan shall be 4,000,000 shares
of Stock. Up to the total number of shares of Stock set forth in the preceding sentence may be issued in satisfaction of ISOs,
but nothing in this Section 4(a) shall be construed as requiring that any, or any fixed number of, ISOs be awarded under the
Plan. The number of shares of Stock delivered in satisfaction of Equity Awards shall, for purposes of this Section 4(a), be
determined net of shares of Stock withheld by the Company in payment of the exercise price of the Award or in satisfaction of tax
withholding requirements with respect to the Award and, for the avoidance of doubt, without including any shares of Stock underlying
Awards settled in cash or which otherwise expire or become unexercisable without having been exercised or are forfeited to or repurchased
by the Company due to failure to vest. The limits set forth in this Section 4(a) shall be construed to comply with Section 422. To
the extent consistent with the requirements of Section 422 and with other applicable legal requirements (including applicable
stock exchange requirements, if any), Stock issued under Substitute Awards shall not reduce the number of shares available for
Awards under the Plan. The shares which may be delivered under Substitute Awards shall be in addition to the limitations set forth
in this Section 4(a) on the number of shares available for issuance under the Plan.


 


(b) Type of Shares. Shares
of Stock delivered by the Company under the Plan may be authorized but unissued Stock or previously issued Stock acquired by the
Company. No fractional shares of Stock will be delivered under the Plan.


 


(c) Non-Employee Director
Limit. The maximum number of shares of Stock subject to Equity Awards granted during a single calendar year
to any director of the Company who is not an Employee, taken together with any cash fees paid during the fiscal year to such individual
in respect of his or her service as a member of the Board during such year (including service as a member or chair of any committees
of the Board), shall not exceed $250,000 in total value (calculating the value of any such Equity Awards based on the grant date
fair value of such Equity Awards for financial reporting purposes).


 


5. ELIGIBILITY AND PARTICIPATION


 


The Administrator will select Participants
from among those key Employees and directors of, and consultants and advisors to, the Company or its Affiliates who, in the opinion
of the Administrator, are in a position to make a significant contribution to the success of the Company and its Affiliates; provided,
that, subject to such express exceptions, if any, as the Administrator may establish, eligibility for Equity Awards shall be further
limited to those persons as to whom the use of a Form S-8 registration statement is permissible. Eligibility for ISOs is limited
to employees of the Company or of a “parent corporation” or “subsidiary corporation” of the Company as
those terms are defined in Section 424 of the Code. Eligibility for Stock Options other than ISOs is limited to individuals
described in the first sentence of this Section 5 who are providing direct services on the date of grant of the Sock Option
to the Company or to a subsidiary of the Company that would be described in the first sentence of Treas. Regs. §1.409A-1(b)(5)(iii)(E).


 


 


 






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6. RULES APPLICABLE TO AWARDS


 


(a) In General


 


(1) Award Provisions. The
Administrator will determine the terms of all Awards, subject to the limitations provided herein. By accepting (or, under such
rules as the Administrator may prescribe, being deemed to have accepted) an Award, the Participant agrees to the terms of the Award
and the Plan. The Administrator will determine whether Equity Awards are settled in shares of Stock or cash or whether the settlement
or payment of Awards shall be subject to deferral. Notwithstanding any provision of this Plan to the contrary, Substitute Awards
may contain terms and conditions that are inconsistent with the terms and conditions specified herein, as determined by the Administrator.


 


(2) Term of Plan. No
Awards may be made after the tenth anniversary of the date that this Plan is first adopted by the Board of Directors of the Company,
but previously granted Awards may continue beyond that date in accordance with their terms.


 


(3) Transferability. Neither
ISOs nor, except as the Administrator otherwise expressly provides in accordance with the second sentence of this Section 6(a)(3),
other Awards may be transferred other than by will or by the laws of descent and distribution, and during a Participant’s
lifetime ISOs (and, except as the Administrator otherwise expressly provides in accordance with the second sentence of this Section 6(a)(3),
other Equity Awards requiring exercise) may be exercised only by the Participant. The Administrator may permit Equity Awards other
than ISOs to be transferred by gift, subject to applicable securities and other laws and such limitations as the Administrator
may impose.


 


(4) Vesting, Etc. The
Administrator shall determine the time or times at which an Equity Award will vest or become exercisable and the terms on which
an Equity Award requiring exercise will remain exercisable. Without limiting the foregoing, the Administrator may at any time accelerate
the vesting or exercisability of an Equity Award, regardless of any adverse or potentially adverse tax or other consequences resulting
from such acceleration. Unless the Administrator expressly provides otherwise, however, the following rules will apply if a Participant’s
Employment ceases: immediately upon the cessation of the Participant’s Employment, each Award requiring exercise that
is then held by the Participant or by the Participant’s permitted transferees, if any, will cease to be exercisable and will
terminate, and all other Awards that are then held by the Participant or by the Participant’s permitted transferees, if any,
to the extent not already vested will be forfeited, except that:


 


(A) subject to (B) and
(C) below, all Stock Options and SARs held by the Participant or the Participant’s permitted transferees, if any, immediately
prior to the cessation of the Participant’s Employment, to the extent then exercisable, will remain exercisable for the lesser
of (i) a period of three months or (ii) the period ending on the latest date on which such Stock Option or SAR could
have been exercised without regard to this Section 6(a)(4), and will thereupon terminate;


 


(B) all Stock Options and
SARs held by a Participant or the Participant’s permitted transferees, if any, immediately prior to the cessation of Participant’s
Employment due to death, to the extent then exercisable, will remain exercisable for the lesser of (i) the one year period
ending with the first anniversary of the Participant’s death or (ii) the period ending on the latest date on which such
Stock Option or SAR could have been exercised without regard to this Section 6(a)(4), and will thereupon terminate; and


 


(C) all Stock Options and
SARs held by a Participant or the Participant’s permitted transferees, if any, immediately prior to the cessation of the
Participant’s Employment will immediately terminate upon such cessation if the Administrator in its sole discretion determines
that such cessation of Employment has resulted for reasons which cast such discredit on the Participant as to justify immediate
termination of the Award or are otherwise determined by the Administrator to constitute cause.


 


(5) Recovery of Compensation;
Other Terms


 


(A) Awards (whether or not
vested or exercisable) held by a Participant are subject to forfeiture, termination and rescission, and a Participant will be obligated
to return to the Company the value received with respect to Awards (including payments made and/or Stock delivered under an Award,
and any gain realized on a subsequent sale or disposition of an Award or Stock delivered under an Award), in each case (i) to
the extent provided by the Administrator in an Award agreement in connection with (A) a breach by the Participant of a non-competition,
non-solicitation, confidentiality or similar covenant or agreement or (B) an overpayment to the Participant of incentive compensation
due to inaccurate financial data, (ii) in accordance with Company policy relating to the recovery of erroneously-paid incentive
compensation, as such policy may be amended and in effect from time to time, or (iii) as otherwise required by law or applicable
stock exchange listing standards, including, without limitation, the Dodd-Frank Wall Street Reform and Consumer Protection Act.


 


 


 






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(B) Each Participant, by
accepting an Award pursuant to the Plan, agrees to return the full amount required under this Section 6(a)(5) at such time
and in such manner as the Administrator shall determine in its sole discretion and consistent with applicable law. Neither the
Administrator nor the Company will be responsible for any adverse tax or other consequences to a Participant that may arise in
connection with this Section 6(a)(5). For the avoidance of doubt, in addition to any forfeiture or other restrictions imposed
by the terms of an Award agreement, every Award issued under the Plan will be subject to potential forfeiture or “claw back”
to the fullest extent called for by applicable federal or state law. In addition, to the extent provided by the Administrator,
Shares received upon settlement, vesting or exercise of an Award may be subject to stock ownership guidelines or policies established
by the Company with respect to its employees, directors and/or other service providers.


 


(6) Taxes. The
Administrator will make such provision for the withholding of taxes as it deems necessary. The Administrator may, but need not,
hold back shares of Stock from an Award or permit a Participant to tender previously owned shares of Stock in satisfaction of tax
withholding requirements (but not in excess of the minimum withholding required by law, or, if and when the Company adopts any
applicable accounting standard allowing for greater share withholding, up to such withholding rate that will not cause an adverse
accounting consequence or cost and is permitted under applicable tax rules).


 


(7) Dividend Equivalents,
Etc. The Administrator may provide for the payment of amounts (on terms and subject to conditions established
by the Administrator) in lieu of cash dividends or other cash distributions with respect to Stock subject to an Equity Award. Any
entitlement to dividend equivalents or similar entitlements shall be established and administered either consistent with exemption
from, or in compliance with, the requirements of Section 409A. In addition, any amounts payable in respect of Restricted Stock
(or any other Award subject to any vesting condition) may be subject to such limits or restrictions or alternative terms as the
Administrator may impose.


 


(8) Rights Limited. Nothing
in the Plan will be construed as giving any person the right to be granted an Award or to continued employment or service with
the Company or its Affiliates, or any rights as a stockholder except as to shares of Stock actually issued under the Plan. The
loss of existing or potential profit in Awards will not constitute an element of damages in the event of termination of Employment
for any reason, even if the termination is in violation of an obligation of the Company or any Affiliate to the Participant.


 


(9) Coordination with
Other Plans. Awards under the Plan may be granted in tandem with, or in satisfaction of or substitution for,
other Awards under the Plan or awards made under other compensatory plans or programs of the Company or its Affiliates. For example,
but without limiting the generality of the foregoing, awards under other compensatory plans or programs of the Company or its Affiliates
may be settled in Stock (including, without limitation, Unrestricted Stock) if the Administrator so determines, in which case the
shares delivered shall be treated as awarded under the Plan (and shall reduce the number of shares thereafter available under the
Plan in accordance with the rules set forth in Section 4).


 


(10) Section 409A. Each
Award shall contain such terms as the Administrator determines, and shall be construed and administered, such that the Award either
(i) qualifies for an exemption from the requirements of Section 409A, or (ii) satisfies such requirements.


 


(11) Fair Market Value. Except
as otherwise expressly provided herein, in determining the fair market value of any share of Stock under the Plan, the Administrator
shall make the determination in good faith on such basis as it deems appropriate, taking into account the requirements of Section 422
and Section 409A, to the extent applicable; provided, that unless otherwise determined by the Administrator, if
the Stock is admitted to trading on an established securities exchange, “fair market value” shall be the closing price
of a share of Stock on such date (or, if the Stock was not traded on such day, then the next preceding day on which the Stock was
traded).


 


(12) Certain Requirements
of Corporate Law. Equity Awards shall be granted and administered consistent with the requirements of applicable
Delaware law relating to the issuance of stock and the consideration to be received therefor, and with the applicable requirements
of the stock exchanges or other trading systems or national market on which the Stock is listed or entered for trading, in each
case as determined by the Administrator.


 


 


 






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(b) Awards Requiring Exercise.
Equity Awards requiring exercise will be subject to the provisions of this Section 6(b).


 


(1) Time and Manner
of Exercise. Unless the Administrator expressly provides otherwise, an Award requiring exercise by the
holder will not be deemed to have been exercised until the Administrator receives a notice of exercise (in form acceptable to the
Administrator), which may be an electronic notice, signed (including electronic signature in form acceptable to the Administrator)
by the appropriate person and accompanied by any payment required under the Award. If the Award is exercised by any person other
than the Participant, the Administrator may require satisfactory evidence that the person exercising the Award has the right to
do so.


 


(2) Exercise Price. The
exercise price (or the base value from which appreciation is to be measured) of each Award requiring exercise shall be 100% (in
the case of an ISO granted to a ten-percent shareholder within the meaning of subsection (b)(6) of Section 422,
110%) of the fair market value of the Stock (as provided in Section 6(a)(12)) subject to the Award, determined as of the date
of grant, or such higher amount as the Administrator may determine in connection with the grant or as otherwise determined by the
Administrator with respect to a Substitute Award.


 


(3) Payment of Exercise
Price. Where the exercise of an Award is to be accompanied by payment, payment of the exercise price shall
be by cash or check acceptable to the Administrator, or, if so permitted by the Administrator and if legally permissible, (i) through
the delivery of unrestricted shares of Stock that have a fair market value equal to the exercise price, subject to such holding
requirements, if any, as the Administrator may prescribe, (ii) through a broker-assisted exercise program acceptable to the
Administrator, (iii) through the withholding of shares of Stock otherwise to be delivered upon exercise of the Award whose
fair market value is equal to the aggregate exercise price of the Award being exercised, (iv) by other means acceptable to
the Administrator, or (v) by any combination of the foregoing permissible forms of payment. The delivery of shares in payment
of the exercise price under clause (i) above may be accomplished either by actual delivery or by constructive delivery through
attestation of ownership, subject to such rules as the Administrator may prescribe.


 


(4) Maximum Term. Awards
requiring exercise will have a maximum term not to exceed ten (10) years from the date of grant (or five (5) years from
the date of grant in the case of an ISO granted to a ten-percent shareholder described in Section 6(b)(2) above); provided,
that if an Award requiring exercise (other than an ISO) would otherwise expire as a result of expiration of the maximum term of
such Award (i.e., ten (10) years from the date of grant or such shorter time period as set forth in an Award agreement), and
at such time the Participant holding such Award is prohibited by applicable law or written Company policy applicable to similarly
situated employees from engaging in any open-market sales of Stock, the maximum term of such Award will automatically extend to
thirty (30) days following the date the Participant is no longer prohibited from engaging in such open-market sales.


 


(c) Cash Awards


 


(1) A Participant who is
granted a Cash Award shall be entitled to a payment, if any, under the Award only if all conditions to payment have been satisfied
in accordance with the Plan and the terms of the Award. The Administrator will determine the actual payment, if any, under each
Cash Award. The Administrator may, in its sole and absolute discretion, after determining the amount that would otherwise be payable
for a Performance Period with respect to a Cash Award that is a Performance Award, adjust (including to zero) the payment, if any,
to be made under such Award.


 


(2) The Administrator shall
determine the payment dates for Cash Awards under the Plan. Except as otherwise determined by the Administrator, no payment shall
be made under a Cash Award unless the Participant’s Employment continues through the date such Cash Award is paid. Payments
hereunder are intended to fall under the short-term deferral exception to Section 409A and shall be construed and administered
accordingly. Notwithstanding the foregoing, (i) if the documentation establishing the Cash Award provides a specified and
objectively determinable payment date or schedule that satisfies the requirements of Section 409A, payment under an Award
may be made in accordance with such date or schedule, and (ii) the Administrator may, but need not, permit a Participant to
defer payment of a Cash Award beyond the date that the Award would otherwise be payable, provided, that any such deferral
shall be made in accordance with and subject to the applicable requirements of Section 409A.


 


 


 






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7. EFFECT OF CERTAIN TRANSACTIONS


 


(a) Mergers, Etc. Except
as otherwise provided in an Award, the Administrator shall, in its sole discretion, determine the effect of a Covered Transaction
on Awards, which determination may include, but is not limited to, the following actions:


 


(1) Assumption or
Substitution. If the Covered Transaction is one in which there is an acquiring or surviving entity, the Administrator
may provide for the assumption or continuation of some or all outstanding Awards or for the grant of new awards in substitution
therefor by the acquiror or survivor or an affiliate of the acquiror or survivor.


 


(2) Cash-Out of
Awards. If the Covered Transaction is one in which holders of Stock will receive upon consummation a payment
(whether cash, non-cash or a combination of the foregoing), then subject to Section 7(a)(5) below the Administrator
may provide for payment (a “cash-out”), with respect to some or all Awards or any portion thereof, equal
in the case of each affected Equity Award or portion thereof to the excess, if any, of (A) the fair market value of one share of
Stock times the number of shares of Stock subject to the Award or such portion, over (B) the aggregate exercise or purchase
price, if any, under the Award or such portion (in the case of an SAR, the aggregate base value above which appreciation is measured),
in each case on such payment terms (which need not be the same as the terms of payment to holders of Stock) and other terms, and
subject to such conditions, as the Administrator determines; provided, that the Administrator shall not exercise its
discretion under this Section 7(a)(2) with respect to an Award or portion thereof providing for “nonqualified deferred
compensation” subject to Section 409A in a manner that would constitute an extension or acceleration of, or other change
in, payment terms if such change would be inconsistent with the applicable requirements of Section 409A.


 


(3) Acceleration of
Certain Awards. If the Covered Transaction (whether or not there is an acquiring or surviving entity) is one
in which there is no assumption, continuation, substitution or cash-out, then subject to Section 7(a)(5) below, the Administrator
may provide that each Equity Award requiring exercise will become fully exercisable, and the delivery of any shares of Stock remaining
deliverable under each outstanding Award of Stock Units (including Restricted Stock Units and Performance Awards to the extent
consisting of Stock Units) will be accelerated and such shares will be delivered, prior to the Covered Transaction, in each case
on a basis that gives the holder of the Award a reasonable opportunity, as determined by the Administrator, following exercise
of the Award or the delivery of the shares, as the case may be, to participate as a stockholder in the Covered Transaction; provided,
that to the extent acceleration pursuant to this Section 7(a)(3) of an Award subject to Section 409A would cause the
Award to fail to satisfy the requirements of Section 409A, the Award shall not be accelerated and the Administrator in lieu
thereof shall take such steps as are necessary to ensure that payment of the Award is made in a medium other than Stock and on
terms that as nearly as possible, but taking into account adjustments required or permitted by this Section 7, replicate the
prior terms of the Award.


 


(4) Termination of
Awards Upon Consummation of Covered Transaction. Each Award will terminate upon consummation of the Covered
Transaction, other than the following: (i) Awards assumed pursuant to Section 7(a)(1) above; (ii) Awards converted
pursuant to the proviso in Section 7(a)(3) above into an ongoing right to receive payment other than Stock; (iii) outstanding
shares of Restricted Stock (which shall be treated in the same manner as other shares of Stock, subject to Section 7(a)(5)
below); and (iv) Cash Awards that by their terms, or as a result of action taken by the Administrator, continue following
such Covered Transaction.


 


(5) Additional Limitations. Any
share of Stock and any cash or other property delivered pursuant to Section 7(a)(2) or Section 7(a)(3) above with respect
to an Equity Award may, in the discretion of the Administrator, contain such restrictions, if any, as the Administrator deems appropriate
to reflect any performance or other vesting conditions to which the Award was subject and that did not lapse (and were not satisfied)
in connection with the Covered Transaction. For purposes of the immediately preceding sentence, a cash out under Section 7(a)(2)
above or the acceleration of exercisability of an Award under Section 7(a)(3) above shall not, in and of itself, be treated
as the lapsing (or satisfaction) of a performance or other vesting condition. In the case of Restricted Stock that does not vest
in connection with the Covered Transaction, the Administrator may require that any amounts delivered, exchanged or otherwise paid
in respect of such Stock in connection with the Covered Transaction be placed in escrow or otherwise made subject to such restrictions
as the Administrator deems appropriate to carry out the intent of the Plan.


 


 


 






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(b) Changes in and Distributions
With Respect to Stock


 


(1) Basic Adjustment
Provisions. In the event of a stock dividend, stock split or combination of shares (including a reverse stock
split), recapitalization or other change in the Company’s capital structure that constitutes an equity restructuring within
the meaning of FASB ASC Topic 718, the Administrator shall make appropriate adjustments to the maximum number of shares specified
in Section 4(a) that may be delivered under the Plan and shall also make appropriate adjustments to the number and kind of
shares of stock or securities subject to Equity Awards then outstanding or subsequently granted, any exercise prices relating to
Equity Awards and any other provision of Awards affected by such change.


 


(2) Certain Other
Adjustments. The Administrator may also make adjustments of the type described in Section 7(b)(1) above
to take into account distributions to stockholders other than those provided for in Section 7(a) and 7(b)(1), or any other
event, if the Administrator determines that adjustments are appropriate to avoid distortion in the operation of the Plan and to
preserve the value of Awards made hereunder, having due regard for the qualification of ISOs under Section 422 and the requirements
of Section 409A, to the extent applicable.


 


(3) Continuing Application
of Plan Terms. References in the Plan to shares of Stock will be construed to include any stock or securities
resulting from an adjustment pursuant to this Section 7.


 


8. LEGAL CONDITIONS ON DELIVERY OF
STOCK


 


The Company will not be obligated to
deliver any shares of Stock pursuant to the Plan or to remove any restriction from shares of Stock previously delivered under the
Plan until: (i) the Company is satisfied that all legal matters in connection with the issuance and delivery of such shares
have been addressed and resolved; (ii) if the outstanding Stock is at the time of delivery listed on any stock exchange or
national market system, the shares to be delivered have been listed or authorized to be listed on such exchange or system upon
official notice of issuance; and (iii) all conditions of the Award have been satisfied or waived. The Company may require,
as a condition to exercise of the Award or delivery of shares of Stock under an Award, such representations or agreements as counsel
for the Company may consider appropriate to avoid violation of such the Securities Act of 1933, as amended, or any applicable state
or non-U.S. securities law. Any Stock required to be issued to Participants under the Plan will be evidenced in such
manner as the Administrator may deem appropriate, including book-entry registration or delivery of stock certificates. In the event
that the Administrator determines that stock certificates will be issued to Participants under the Plan, the Administrator may
require that certificates evidencing Stock issued under the Plan bear an appropriate legend reflecting any restriction on transfer
applicable to such Stock, and the Company may hold the certificates pending lapse of the applicable restrictions.


 


9. AMENDMENT AND TERMINATION


 


The Administrator may at any time or
times amend the Plan or any outstanding Award for any purpose which may at the time be permitted by law, and may at any time terminate
the Plan as to any future grants of Awards; provided, that except as otherwise expressly provided in the Plan the Administrator
may not, without the Participant’s consent, alter the terms of an Award so as to affect materially and adversely the Participant’s
rights under the Award, unless the Administrator expressly reserved the right to do so at the time of the Award. Any amendments
to the Plan shall be conditioned upon stockholder approval only to the extent, if any, such approval is required by law (including
the Code and applicable stock exchange requirements), as determined by the Administrator. For the avoidance of doubt, no amendment
to the Plan shall be effective unless approved by stockholders, to the extent stockholder approval is required under the rules
of the applicable stock exchange on which the Stock is admitted to trading, if it would reduce the exercise price of any Stock
Option previously granted hereunder or otherwise constitute a repricing and, without the receipt of such approval (to the extent
so required), the Administrator shall not approve a repurchase by the Company for cash or other property of Stock Options or SARs
for which the exercise price or base price, as applicable, exceeds the fair market value of a share of Stock as of the date of
such repurchase. For avoidance of doubt, any amendments to the Plan will not modify any Awards granted under the Plan prior to
June 5, 2018 to the extent such modification would result in a loss of deductibility under Section 162(m).


 


10. OTHER COMPENSATION ARRANGEMENTS


 


The existence of the Plan or the grant
of any Award will not in any way affect the Company’s right to award a person bonuses or other compensation in addition to
Awards under the Plan.


 


 


 






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11. MISCELLANEOUS


 


(a) Waiver of Jury Trial. By
accepting an Award under the Plan, each Participant waives any right to a trial by jury in any action, proceeding or counterclaim
concerning any rights under the Plan and any Award, or under any amendment, waiver, consent, instrument, document or other agreement
delivered or which in the future may be delivered in connection therewith, and agrees that any such action, proceedings or counterclaim
shall be tried before a court and not before a jury. By accepting an Award under the Plan, each Participant certifies that no officer,
representative, or attorney of the Company has represented, expressly or otherwise, that the Company would not, in the event of
any action, proceeding or counterclaim, seek to enforce the foregoing waivers.


 


(b) Limitation of Liability. Notwithstanding
anything to the contrary in the Plan, neither the Company, nor any Affiliate, nor the Administrator, nor any person acting on behalf
of the Company, any Affiliate, or the Administrator, shall be liable to any Participant or to the estate or beneficiary of any
Participant or to any other holder of an Award by reason of any acceleration of income, or any additional tax (including any interest
and penalties), asserted by reason of the failure of an Award to satisfy the requirements of Section 422 or Section 409A
or by reason of Section 4999 of the Code, or otherwise asserted with respect to the Award; provided, that nothing
in this Section 11(b) shall limit the ability of the Administrator or the Company, in its discretion, to provide by separate
express written agreement with a Participant for a gross-up payment or other payment in connection with any such acceleration
of income or additional tax.


 


12. ESTABLISHMENT OF SUB-PLANS


 


The Board may from time to time establish
one or more sub-plans under the Plan for purposes of satisfying applicable blue sky, securities or tax laws of various
jurisdictions. The Board will establish such sub-plans by adopting supplements to the Plan setting forth (i) such
limitations on the Administrator’s discretion under the Plan as the Board deems necessary or desirable and (ii) such
additional terms and conditions not otherwise inconsistent with the Plan as the Board deems necessary or desirable. All supplements
adopted by the Board will be deemed to be part of the Plan, but each supplement will apply only to Participants within the affected
jurisdiction and the Company will not be required to provide copies of any supplement to Participants in any jurisdiction that
is not affected.


 


13. GOVERNING LAW


 


Except as otherwise provided by the
express terms of an Award agreement or under a sub-plan described in Section 12, the provisions of the Plan and of Awards
under the Plan and all claims or disputes arising out of our based upon the Plan or any Award under the Plan or relating to the
subject matter hereof or thereof will be governed by and construed in accordance with the General Corporation Law of the State
of Delaware as to matters within the scope thereof, and as to all other matters shall be governed by and construed in accordance
with the domestic substantive laws of the State of Delaware without giving effect to any choice or conflict of laws provision or
rule that would cause the application of the domestic substantive laws of any other jurisdiction.


 


 


 






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EXHIBIT A


 


Definition
of Terms


 


The following terms, when used in the
Plan, will have the meanings and be subject to the provisions set forth below:


 


“Administrator”: The
Compensation Committee, except that the Compensation Committee may delegate (i) to one or more of its members (or one or more
other members of the Board, including the full Board) such of its duties, powers and responsibilities as it may determine; (ii) to
one or more officers of the Company the power to grant Awards to the extent permitted by Section 157(c) of the Delaware General
Corporation Law; and (iii) to such Employees or other persons as it determines such ministerial tasks as it deems appropriate.


 


“Affiliate”: Any
corporation or other entity that stands in a relationship to the Company that would result in the Company and such corporation
or other entity being treated as one employer under Section 414(b) and Section 414(c) of the Code, except that in determining
eligibility for the grant of a Stock Option or SAR by reason of service for an Affiliate, Sections 414(b) and 414(c) of the Code
shall be applied by substituting “at least 50%” for “at least 80%” under Section 1563(a)(1), (2) and
(3) of the Code and Treas. Regs. § 1.414(c)-2; provided, that to the extent permitted under Section 409A,
“at least 20%” shall be used in lieu of “at least 50%”; and further provided, that the lower
ownership threshold described in this definition (50% or 20% as the case may be) shall apply only if the same definition of affiliation
is used consistently with respect to all compensatory stock options or stock awards (whether under the Plan or another plan). The
Company may at any time by amendment provide that different ownership thresholds (consistent with Section 409A) apply but
any such change shall not be effective for twelve (12) months.


 


“Award”: Any
or a combination of the following, any of which may be, in the discretion of the Administrator, a Performance Award:


 


(i) Stock Options.


 


(ii) SARs.


 


(iii) Restricted Stock.


 


(iv) Unrestricted Stock.


 


(v) Stock Units, including
Restricted Stock Units.


 


(vi) Cash Awards.


 


(vii) Awards (other than
Awards described in (i) through (vii) above) that are convertible into or otherwise based on Stock.


 


“Board”: The
Board of Directors of the Company; provided, however, that if the Company is a direct or indirect subsidiary of a publicly
held corporation, it shall mean the Board of Directors of the publicly held corporation.


 


“Cash Award”: An
Award denominated in cash.


 


“Code”: The
U.S. Internal Revenue Code of 1986 as from time to time amended and in effect, or any successor statute as from time to time in
effect.


 


“Compensation Committee”: In
the event that the Company is a direct or indirect subsidiary of a publicly held corporation, the Compensation Committee shall
mean the Compensation Committee of the Board of the publicly held corporation; otherwise, Compensation Committee shall mean the
Compensation Committee of the Board.


 


 


 






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“Company”: Phio
Pharmaceuticals Corp.


 


“Covered Transaction”: Any
of (i) a consolidation, merger, or similar transaction or series of related transactions, including a sale or other disposition
of stock, in which the Company is not the surviving corporation or which results in the acquisition of all or substantially all
of the Company’s then outstanding common stock by a single person or entity or by a group of persons and/or entities acting
in concert, (ii) a sale or transfer of all or substantially all the Company’s assets, or (iii) a dissolution or
liquidation of the Company. Where a Covered Transaction involves a tender offer that is reasonably expected to be followed by a
merger described in clause (i) (as determined by the Administrator), the Covered Transaction shall be deemed to have occurred upon
consummation of the tender offer.


 


“Employee”: Any
person who is employed by the Company or an Affiliate.


 


“Employment”: A
Participant’s employment or other service relationship with the Company and its Affiliates. Employment will be deemed to
continue, unless the Administrator expressly provides otherwise, so long as the Participant is employed by, or otherwise is providing
services in a capacity described in Section 5 to the Company or its Affiliates. If a Participant’s employment or other
service relationship is with an Affiliate and that entity ceases to be an Affiliate, the Participant’s Employment will be
deemed to have terminated when the entity ceases to be an Affiliate unless the Participant transfers Employment to the Company
or its remaining Affiliates. Notwithstanding the foregoing and the definition of “Affiliate” above, in construing the
provisions of any Award relating to the payment of “nonqualified deferred compensation” (subject to Section 409A)
upon a termination or cessation of Employment, references to termination or cessation of employment, separation from service, retirement
or similar or correlative terms shall be construed to require a “separation from service” (as that term is defined
in Section 1.409A-1(h) of the Treasury Regulations) from the Company and from all other corporations and trades
or businesses, if any, that would be treated as a single “service recipient” with the Company under Section 1.409A-1(h)(3)
of the Treasury Regulations. The Company may, but need not, elect in writing, subject to the applicable limitations under Section 409A,
any of the special elective rules prescribed in Section 1.409A-1(h) of the Treasury Regulations for purposes of
determining whether a “separation from service” has occurred. Any such written election shall be deemed a part of the
Plan.


 


“Equity Award”:
Awards other than Cash Awards.


 


“ISO”: A Stock
Option intended to be an “incentive stock option” within the meaning of Section 422. Each option granted
pursuant to the Plan will be treated as providing by its terms that it is to be a non-incentive stock option unless,
as of the date of grant, it is expressly designated as an ISO.


 


“Participant”: A
person who is granted an Award under the Plan.


 


“Performance Award”: An
Award subject to Performance Criteria.


 


“Performance Criteria”: For
a Performance Period, specified criteria, other than the mere continuation of Employment or the mere passage of time, the satisfaction
of which is a condition for the grant, exercisability, vesting or full enjoyment of an Award. Performance Criteria may include
an objectively determinable measure of performance relating to any or any combination of the following (measured either absolutely
or by reference to an index or indices or on an individual basis and determined either on a consolidated basis or, as the context
permits, on a divisional, subsidiary, line of business, project or geographical basis or in combinations thereof): sales; revenues;
assets; expenses; earnings before or after deduction for all or any portion of interest, taxes, depreciation, or amortization,
whether or not on a continuing operations or an aggregate or per share basis; return on equity, investment, capital or assets;
one or more operating ratios; borrowing levels, leverage ratios or credit rating; market share; capital expenditures; cash flow;
stock price; stockholder return; sales of particular products or services; customer acquisition or retention; acquisitions and
divestitures (in whole or in part); joint ventures and strategic alliances; spin-offs, split-ups and the like; reorganizations;
or recapitalizations, restructurings, financings (issuance of debt or equity) or refinancings; and any other objective or subjective
measure or metric as the Administrator deems appropriate. A Performance Criterion and any targets with respect thereto determined
by the Administrator need not be based upon an increase, a positive or improved result or avoidance of loss. The Administrator
may establish that in the case of any Award intended to qualify for such exception that one or more of the Performance Criteria
applicable to such Award will be adjusted to reflect events (for example, the impact of charges for restructurings, discontinued
operations, mergers, acquisitions, extraordinary items, and other unusual, infrequently occurring or non-recurring items,
the cumulative effects of tax or accounting changes and any other inclusions or exclusions as the Administrator may determine)
occurring during the Performance Period that affect the applicable Performance Criterion or Criteria.


 


 


 






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“Performance Period”: A
period of time, as the may Administrator may select in its discretion, over which the attainment of one or more Performance Criteria
will be measured for the purpose of determining a grantee’s right to and the vesting and/or payment of an Award. Performance
Periods may be of varying length and of overlapping durations as determined by the Administrator.


 


“Plan”: The
Phio  Pharmaceuticals Corp. 2012 Long Term Incentive Plan as from time to time amended and in effect.


 


“Restricted Stock”: Stock
subject to restrictions requiring that it be redelivered or offered for sale to the Company if specified conditions are not satisfied.


 


“Restricted Stock Unit”: A
Stock Unit that is, or as to which the delivery of Stock or cash in lieu of Stock is, subject to the satisfaction of specified
performance or other vesting conditions.


 


“SAR”: A right
entitling the holder upon exercise to receive an amount (payable in cash or in shares of Stock of equivalent value) equal to the
excess of the fair market value (as defined in Section 6(b)) of the shares of Stock subject to the right over the base value
from which appreciation under the SAR is to be measured.


 


“Section 409A”: Section
409A of the Code.


 


“Section 422”: Section
422 of the Code.


 


“Section 162(m)”: Section
162(m) of the Code.


 


“Stock”: Common
stock of the Company, par value $0.0001 per share.


 


“Stock Option”: An
option entitling the holder to acquire shares of Stock upon payment of the exercise price.


 


“Stock Unit”: An
unfunded and unsecured promise, denominated in shares of Stock, to deliver Stock or cash measured by the value of Stock in the
future.


 


Substitute Awards”: Awards
that are the result of converting, replacing, or adjusting equity awards of an acquired company in connection with the acquisition.


 


“Unrestricted Stock”: Stock
not subject to any restrictions under the terms of the Award.


 


 


 


 




 


 


 






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