Document:

Registrant's Management Proxy Circular

 Exhibit 4.4 

 

 

 TEKMIRA PHARMACEUTICALS CORPORATION 

NOTICE OF ANNUAL MEETING 

AND 

MANAGEMENT INFORMATION CIRCULAR 

May 12, 2010 

 TEKMIRA PHARMACEUTICALS CORPORATION 

100 – 8900 Glenlyon Parkway 

Burnaby, British Columbia V5J 5J8 

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS 

TAKE NOTICE that the annual meeting (the “Meeting”) of the shareholders (the “Shareholders”) of TEKMIRA
PHARMACEUTICALS CORPORATION (“Tekmira”) will be held at the The Four Seasons Hotel, 791 West Georgia Street, Vancouver, British Columbia, on June 23, 2010 at 1:00 p.m., local time, for the following purposes: 

 

	1.	to receive the report of the directors of Tekmira; 

  

	2.	to elect directors for the ensuing year; 

  

	3.	to appoint auditors of Tekmira for the ensuing year; and 

  

	4.	to transact such other business as may properly come before the Meeting or any adjournment thereof. 

An Information Circular accompanies this Notice. The Information Circular contains details of the matters to be considered at the
Meeting. 
 Regardless of whether or not a Shareholder plans to attend the Meeting in person, please complete, date and sign the
enclosed form of proxy and deliver it by hand, mail or facsimile in accordance with the instructions set out in the form of proxy and in the Information Circular. 

DATED at Vancouver, British Columbia, May 12, 2010 

BY ORDER OF THE BOARD 
 (signed)
Dr. Daniel Kisner 
 Chairman of the Board 

 TEKMIRA PHARMACEUTICALS CORPORATION 

100 – 8900 Glenlyon Parkway 

Burnaby, British Columbia 

V5J 5J8 

INFORMATION CIRCULAR 

unless otherwise noted, as at April 26, 2010 

THE MEETING 

This management information circular (the “Information Circular”) is furnished in connection with the solicitation of proxies
by the management of Tekmira Pharmaceuticals Corporation for use at the annual general meeting (the “Meeting”) of its shareholders to be held on June 23, 2010 at the time and place and for the purposes set forth in the accompanying
notice of the Meeting. 
 In this Information Circular, references to “the Company”, “Tekmira”,
“we” and “our” refer to Tekmira Pharmaceuticals Corporation. “Common Shares” means common shares without par value in the capital of the Company; “Shareholders” means holders of Common Shares; “Beneficial
Shareholders” means Shareholders who do not hold Common Shares in their own name; “Registered Shareholders” means Shareholders which are registered holders of Common Shares; and “Intermediaries” refers to brokers, investment
firms, clearing houses and similar entities that own securities on behalf of Beneficial Shareholders. 
 VOTING INFORMATION

 Tekmira’s management is using this Information Circular to solicit proxies from Shareholders for use at the Meeting.

 Solicitation of Proxies 

The solicitation of proxies will be primarily by mail, but Tekmira’s directors, officers and regular employees may also solicit
proxies personally or by telephone. Tekmira will bear all costs of the solicitation, including the printing, handling and mailing of the Meeting materials. Tekmira has arranged for Intermediaries to forward the Meeting materials to beneficial owners
of Tekmira held of record by those Intermediaries and Tekmira may reimburse the Intermediaries for their reasonable fees and disbursements in that regard. 

Appointment of Proxyholders 

The individuals named in the accompanying form of proxy (the “Proxy”) are directors or officers of Tekmira. If you are a
Shareholder entitled to vote at the Meeting, you have the right to appoint an individual or company other than either of the individuals designated in the Proxy, who need not be a Shareholder, to attend and act for you and on your behalf at the
Meeting. You may do so either by striking out the name of the persons named in the Proxy and inserting the name desired of that other individual or company in the blank space provided in the Proxy or by completing and delivering another suitable
form of proxy. 
 The only methods by which you may appoint a person as proxy are submitting a proxy by mail, hand delivery
or fax. 
 Voting by Proxyholder 

If a Shareholder specifies a choice for a matter in the Proxy, and if the Proxy is duly completed and delivered and has not been revoked,
the individuals named in the Proxy will vote, or withhold voting, the common shares of Tekmira represented thereby in accordance with the choice you specify on any ballot that may be called for. The Proxy confers discretionary authority on the
individuals named therein with respect to: 
  

	 	•	 	 each matter or group of matters identified therein for which a choice is not specified; 

	 	•	 	 any amendment to or variation of any matter identified therein; and 

 

	 	•	 	 any other matter that properly comes before the Meeting. 

In respect of a matter for which a choice is not specified in the Proxy, the individuals named in the Proxy will vote common shares of
Tekmira represented by the Proxy for the approval of such matter. 
 Registered Shareholders 

If you are a Registered Shareholder, you may wish to vote by proxy whether or not you attend the Meeting in person. If you wish to submit
a Proxy, you must complete, date and sign the Proxy, and then return it to Tekmira’s transfer agent, CIBC Mellon Trust Company, by fax at 1-866-781-3111 (toll free in North America) or 416-368-2502, or by mail (via postage paid return envelope)
at CIBC Mellon Trust Company, P.O. Box 721, Agincourt, Ontario, M5A 4K9 or by hand delivery at 320 Bay Street, Banking Hall Level, Toronto, Ontario, before 1:00 p.m. (Vancouver time) on Monday, June 21, 2010, or, if the Meeting is adjourned,
the day that is two business days before any reconvening thereof at which the Proxy is to be used, or to the chair of the Meeting on the day of the Meeting or any reconvening thereof, or in any other manner provided by law. The Chairman of the
Meeting may waive the proxy cut-off without notice. 
 Beneficial Shareholders 

The following information is of significant importance to Shareholders who do not hold common shares of Tekmira in their own name.
Beneficial Shareholders should note that the only proxies that can be recognized and acted upon at the Meeting are those deposited by Registered Shareholders. 

If common shares of Tekmira are listed in an account statement provided to a Shareholder by a broker, then in almost all cases those
common shares of Tekmira will not be registered in the Shareholder’s name on the records of Tekmira. Such common shares of Tekmira will more likely be registered under the names of the Shareholder’s broker or an agent of that broker. In
the United States, the vast majority of such common shares of Tekmira are registered under the name of Cede & Co., as nominee for The Depository Trust Company (which acts as depositary for many U.S. brokerage firms and custodian banks), and
in Canada, under the name of CDS & Co. (the registration name for CDS Clearing and Depository Services Inc., which acts as nominee for many Canadian brokerage firms). 

Intermediaries are required to seek voting instructions from Beneficial Shareholders in advance of shareholders’ meetings. Every
Intermediary has its own mailing procedures and provides its own return instructions to clients. 
 The Information Circular is
being sent to both Registered Shareholders and Beneficial Shareholders. There are two kinds of Beneficial Shareholders — those who object to their names being made known to the issuers of securities which they own (called OBOs for Objecting
Beneficial Owners), and those who do not so object (called NOBOs for Non-Objecting Beneficial Owners). 
 Tekmira is taking
advantage of National Instrument 54-101 - Communications with Beneficial Owners of Securities of a Reporting Issuer, which permits it to deliver proxy-related materials indirectly to its NOBOs and OBOs. As a result, NOBOs and OBOS can expect
to receive Meeting materials from their Intermediaries via Broadridge Financial Solutions Inc. (“Broadridge”), including a voting information form (“VIF”). Beneficial Shareholders should follow the instructions in the VIF to
ensure that their common shares of Tekmira are voted at the Meeting. The VIF or form of proxy will name the same individuals as Tekmira’s Proxy to represent you at the Meeting. You have the right to appoint a person (who need not be a
Shareholder of Tekmira) other than the individuals designated in the VIF, to represent you at the Meeting. To exercise this right, you should insert the name of your desired representative in the blank space provided in the VIF. The completed VIF
must then be returned in accordance with the instructions in the VIF. Broadridge then tabulates the results of all instructions received and completed in accordance with the instructions provided in the VIF and provides appropriate instructions
respecting the voting of common shares of Tekmira to be represented at the Meeting. If you receive a VIF from Broadridge, 

 

 - 2 - 

 
you cannot use it to vote common shares of Tekmira directly at the Meeting – the VIF must be completed and returned in accordance with its instructions, well in advance of the
Meeting in order to have your common shares of Tekmira voted.  
 Although as a Beneficial Shareholder you may not be
recognized directly at the Meeting for the purposes of voting common shares of Tekmira registered in the name of your broker, you, or a person designated by you, may attend at the Meeting as proxyholder for your broker and vote your common shares of
Tekmira in that capacity. If you wish to attend the Meeting and indirectly vote your common shares of Tekmira as proxyholder for your broker, or to have a person designated by you do so, you should enter your own name, or the name of the person you
wish to designate, in the blank space on the VIF provided to you and return the same in accordance with the instructions provided in the VIF, well in advance of the Meeting. 

Alternatively, you can request in writing that your broker send you a legal proxy which would enable you to attend the Meeting and vote
your common shares of Tekmira. 
 Notice to Shareholders in the United States 

The solicitation of proxies involve securities of an issuer located in Canada and are being effected in accordance with the corporate laws
of the Province of British Columbia, Canada and securities laws of the provinces of Canada. The proxy solicitation rules under the United States Securities Exchange Act of 1934, as amended, are not applicable to Tekmira or this solicitation,
and this solicitation has been prepared in accordance with the disclosure requirements of the securities laws of the provinces of Canada. Shareholders should be aware that disclosure requirements under the securities laws of the provinces of Canada
differ from the disclosure requirements under United States securities laws. 
 The enforcement by Shareholders of civil
liabilities under United States federal securities laws may be affected adversely by the fact that Tekmira is incorporated under the Business Corporations Act (British Columbia), as amended, certain of its directors and its executive officers
are residents of Canada and a substantial portion of its assets and the assets of such persons are located outside the United States. Shareholders may not be able to sue a foreign company or its officers or directors in a foreign court for
violations of United States federal securities laws. It may be difficult to compel a foreign company and its officers and directors to subject themselves to a judgment by a United States court. 

Revocation of Proxies 

In addition to revocation in any other manner permitted by law, a Registered Shareholder who has given a Proxy may revoke it (a) by
executing a proxy bearing a later date, (b) by executing a valid notice of revocation (where a new proxy is not also filed), or (c) personally attending the Meeting and voting the Registered Shareholder’s common shares of Tekmira.

 A later dated proxy or notice of revocation must be executed by the Registered Shareholder or the
Registered Shareholder’s authorized attorney in writing, or, if the Registered Shareholder is a corporation, under its corporate seal by an officer or attorney duly authorized, and delivered to the Proxy Department, CIBC Mellon Trust Company,
P.O. Box 721, Agincourt, Ontario, M5A 4K9, or by hand to 320 Bay Street, Banking Hall Level, Toronto, Ontario, or to the address of the registered office of Tekmira at 700 West Georgia,
25th Floor, Vancouver, British Columbia, V7Y 1B3
(Attention of R. Hector MacKay-Dunn, Q.C.). 
 A later dated proxy must be received before 1:00 p.m. (Vancouver time) on Monday,
June 21, 2010, or, if the Meeting is adjourned, the day that is two business days before any reconvening thereof at which the Proxy is to be used, or to the chair of the Meeting on the day of the Meeting or any reconvening thereof, or in any
other manner provided by law. 
 A notice of revocation must be received before 1:00 p.m. (Vancouver time) on Tuesday,
June 22, 2010, or, if the Meeting is adjourned, the last business day before any reconvening thereof at which the Proxy is to be used, or to the chair of the Meeting on the day of the Meeting or any reconvening thereof, or in any other manner
provided by law. 
  

 - 3 - 

 Only Registered Shareholders have the right to revoke a proxy. Beneficial Shareholders who
wish to change their vote must, in sufficient time in advance of the Meeting, arrange for their Intermediaries to change the vote and, if necessary, revoke their proxy. 

A revocation of a proxy will not affect a matter on which a vote is taken before the revocation. 

Voting Securities and Principal Holders of Voting Securities 

Record Date and Outstanding Shares 

The Record Date for determining persons entitled to receive notice of and vote at the Meeting is May 14, 2010. Only Shareholders as
of the close of business on May 14, 2010 are entitled to receive notice of and vote at the Meeting, or any adjournment or postponement thereof, in the manner and subject to the procedures described in this Information Circular. A quorum for the
transaction of business at the Meeting is at least two people who are, or who represent by proxy, one or more shareholders who, in the aggregate, hold at least 5% of the issued common shares of Tekmira. 

At the close of business on April 26, 2010, 51,643,605 common shares of Tekmira were issued and outstanding. Each Shareholder is
entitled to one vote per common share of Tekmira held on all matters to come before the Meeting. Common shares of Tekmira are the only securities of Tekmira which will have voting rights at the Meeting. 

Principal Holders of Common Shares of Tekmira 

To the knowledge of the directors and executive officers of the Company, no person or corporation owned, directly or indirectly, or
exercised control or direction over, Common Shares carrying more than 10% of the voting rights attached to all outstanding Common Shares of Tekmira as at April 26, 2010, except as follows: 

 

						
	 Name
	  	Number of Common
Shares 
Beneficially Owned	  	Percentage of
Outstanding Common 
Shares	 
	 Growth Works Capital Ltd. & Affiliates.
	  	8,522,104	  	16.5	% 

 ELECTION OF
DIRECTORS 
 The size of the Board of Directors of the Company is fixed at eight. The term of office of each of the current
directors will end immediately before the election of directors at the Meeting. Unless the director’s office is earlier vacated in accordance with the provisions of the Business Corporations Act (British Columbia) and the articles of
Tekmira, each director elected will hold office until immediately before the election of new directors at the next annual general meeting of the Company or, if no director is then elected, until a successor is elected or appointed. 

The following table sets out the names of management’s nominees for election as directors, all major offices and positions with the
Company and any of its significant affiliates each nominee now holds, each nominee’s principal occupation, business or employment, the period of time during which each has been a director of the Company and the number of common shares of
Tekmira beneficially owned, controlled or directed by each, directly or indirectly, as at April 26, 2010. 
  

 - 4 - 

								
	 Nominee Name, Position with

the Company and Residency
	  	 Principal Occupation

for the Past Five Years
	  	 Period as a

Director of

the

Company
	  	Common Shares
of 
Tekmira
Beneficially
Owned,
Controlled 
or
Directed(1)	 
				
	 MICHAEL
ABRAMS(11),(13)

 Director

Washington, U.S.A
	  	Since November 2009, President and CEO of Inimex Pharmaceuticals; since 2008, Chairman of Indel Therapeutics Inc.; President, Chief Executive Officer and director of AnorMED Inc.
until May, 2006; director of Migenix Inc. until August 2008; Director for the Centre for Drug Research and Development; Adjunct Professor at the University of British Columbia	  	Since May 30, 2008	  	12,500
	(2) 

				
	 ARTHUR BRUSKIN

Director
 New York, U.S.A.
	  	Since 2006, independent consultant; from 2009 to 2010 part-time Chief Scientific Officer at America Stem Cell, Inc.; from 2006 to 2008 Chief Operating Officer of Eutropics
Pharmaceuticals Inc.; from 2005 to 2006 Chief Scientific Officer of Interpath Pharmaceuticals Inc.	  	Since May 1, 2008	  	2,000
	(3) 

				
	 KENNETH
GALBRAITH(13)

 Director

British Columbia, Canada
	  	Since 2007, General Partner at Ventures West; in 2006 Chairman and Interim CEO of AnorMED Inc.; from 2001 to 2006 independent consultant.	  	Since January 28, 2010	  	76,200
	(4) 

				
	 DON
JEWELL(12)

 Director

British Columbia, Canada
	  	Managing Partner, RIO Industrial (financial management services)	  	Since May 30, 2008	  	1,351,381
	(5) 

				
	 FRANK
KARBE(11
)

 Director
 California, U.S.A.

	  	Since 2004, Chief Financial Officer of Exelixis, Inc.	  	Since January 28, 2010	  	Nil
	(6) 

				
	 DANIEL KISNER

Director and Board Chair
 California,
U.S.A.
	  	Since 2003, Venture Partner at Aberdare Ventures.	  	Since January 28, 2010	  	Nil
	(7) 

				
	 R. IAN
LENNOX(12)

 Director

Florida, U.S.A
	  	Since 2006, Executive Chairman of Ricerca Biosciences, LLC and also Chief Executive Officer since 2008; since 2004, independent consultant and director of a number of biotechnology
companies.	  	Since May 30, 2008	  	Nil
	(8) 

				
	 MARK
MURRAY(9)

 Director, President and CEO

Washington, U.S.A.
	  	Since May, 2008, President, Chief Executive Officer and Director; since 2000, President and Chief Executive Officer of Protiva Biotherapeutics Inc.	  	Since May 30, 2008	  	67,516
	(10) 

 Notes: 
  

	(1)	The number of common shares of Tekmira beneficially owned, controlled or directed, directly or indirectly, by the above nominees for directors, directly or indirectly,
is based on information furnished by the nominees themselves and from the insider reports available at www.sedi.ca. 

	(2)	 Dr. Abrams also holds options to purchase 50,000 commons shares of Tekmira at exercises prices ranging from $0.36 to $0.77 and expiry dates
ranging from December 18, 2018 to January 27, 2020. In addition to these options, Dr. Abrams holds options to purchase 59,309 common shares of Protiva Biotherapeutics Inc. (“Protiva”), a wholly-owned subsidiary of Tekmira,
with an exercise price of $0.30 and expiry dates ranging from January 22, 2011 to May 27, 2017. As part of the business combination between Tekmira and Protiva, Tekmira agreed to issue 200,216 common shares of Tekmira on the exercise of
these stock options. The shares reserved for issue on the exercise of these options is equal to the number of 

 

 - 5 - 

	 	 
Tekmira common shares that would have been issued if the options had been exercised before the completion of the business combination and the shares issued on exercise of the options had then
been exchanged for Tekmira common shares. See “Securities Authorized for Issuance Under Equity Compensation Plans – Additional Shares Subject to Issue” 

	(3)	Dr. Bruskin also holds options to purchase 70,000 commons shares of Tekmira at exercises prices ranging from $0.36 to $1.12 and expiry dates ranging from
March 31, 2018 to January 27, 2020. 

	(4)	Mr. Galbraith also holds options to purchase 25,000 commons shares of Tekmira at an exercise price of $0.77 and an expiry date of January 27, 2020.

	(5)	Mr. Jewell also holds options to purchase 50,000 commons shares of Tekmira at exercises prices ranging from $0.36 to $0.77 and expiry dates ranging from
December 18, 2018 to January 27, 2020. 

	(6)	Mr. Karbe also holds options to purchase 25,000 commons shares of Tekmira at an exercise price of $0.77 and an expiry date of January 27, 2020.

	(7)	Dr. Kisner also holds options to purchase 50,000 commons shares of Tekmira at an exercise price of $0.77 and an expiry date of January 27, 2020.

	(8)	Mr. Lennox also holds options to purchase 50,000 commons shares of Tekmira at exercises prices ranging from $0.36 to $0.77 and expiry dates ranging from
December 18, 2018 to January 27, 2020. 

	(9)	Dr. Murray became the President and Chief Executive Officer of Tekmira following the business combination with Protiva that was competed on May 30, 2008.

	(10)	Dr. Murray also has options to purchase 400,000 commons shares of Tekmira at exercises prices ranging from $0.36 to $0.93 and expiry dates ranging from
August 30, 2018 to January 27, 2020. In addition to these options, Dr. Murray holds options to purchase 404,187 common shares of Protiva, a wholly-owned subsidiary of Tekmira, with an exercise price of $0.30 and expiry dates ranging
from November 19, 2010 to March 1, 2018. As part of the business combination between Tekmira and Protiva, Tekmira agreed to issue 1,364,462 common shares of Tekmira on the exercise of these stock options. The shares reserved for issue on
the exercise of these options is equal to the number of Tekmira common shares that would have been issued if the options had been exercised before the completion of the business combination and the shares issued on exercise of the options had then
been exchanged for Tekmira common shares. See “Securities Authorized for Issuance Under Equity Compensation Plans – Additional Shares Subject to Issue”. 

	(11)	Member of the Audit Committee. 

	(12)	Member of the Executive Compensation and Human Resources Committee. 

	(13)	Member of the Corporate Governance and Nominating Committee. 

As of April 26, 2010, the directors of the Company, as a group, beneficially owned, controlled or directed, directly or indirectly,
an aggregate of 1,535,597 common shares of Tekmira (4,150,275 on a fully diluted basis), representing 3.0% (7.1% fully diluted) of the issued and outstanding common shares of Tekmira. 

The following are brief biographies of nominees for the position of director. This information has been furnished by the respective
nominees. 
 Mark J. Murray, Ph.D., President, Chief Executive Officer and Director. Dr. Murray joined Tekmira in May 2008
concurrent with the closing of the business combination between Tekmira and Protiva. He previously was the President and CEO and founder of Protiva since its inception in 2000. Dr. Murray has over 20 years of experience in both the R&D and
business development and management facets of the biotechnology industry. Dr. Murray has held senior management positions at ZymoGenetics and Xcyte Therapies prior to joining Protiva. Since entering the biotechnology industry Dr. Murray
has successfully completed numerous and varied partnering deals, directed successful product development programs, been responsible for strategic planning programs, raised over $30 million in venture capital and executed extensive business
development initiatives in the U.S., Europe and Asia. During his R&D career, Dr. Murray worked extensively on three programs that resulted in FDA approved drugs, including the first growth factor protein approved for human use, a program he
led for several years following his discovery. Dr. Murray obtained his Ph.D. in Biochemistry from the Oregon Health Sciences University and was a Damon Runyon-Walter Winchell post-doctoral research fellow for three years at the Massachusetts
Institute of Technology. 
 Daniel Kisner, M.D., Chairman. Dr. Kisner is currently a Venture Partner at Aberdare Ventures.
Prior to Aberdare, Dr. Kisner served as President and CEO of Caliper Technologies, a leader in microfluidic lab-on-a-chip technology. He led Caliper from a technology-focused start up to a publicly traded, commercially oriented organization.
Prior to Caliper, he was President and COO of Isis Pharmaceuticals, Inc. Previously, Dr. Kisner was Division VP of Pharmaceutical Development for Abbott Laboratories and VP of Clinical Research and Development at SmithKline Beckman
Pharmaceuticals. In addition, he held a tenured position in the Division of Oncology at the University of Texas, San Antonio School of Medicine and is certified by the American Board of Internal Medicine in Internal Medicine and Medical Oncology.
Dr. Kisner holds a B.A. from Rutgers University and an M.D. from Georgetown University. 
  

 - 6 - 

 Michael J. Abrams, Ph.D., Director. Dr. Abrams has been active in the research, discovery
and development of pharmaceuticals for over 20 years. In 1984, Dr. Abrams joined Johnson Matthey plc and in 1991, was promoted to Manager, Biomedical Research, worldwide for Johnson Matthey. In June 1996 Dr. Abrams initiated the Canadian
venture-backed financing of AnorMED Inc. He is an inventor on the patents that led to the development of the Lantheus technetium-99m heart imaging agent, Cardiolite® and is a co-inventor on several products currently in clinical trials. He is
also a named inventor on an additional 15 patents and has authored over 60 scientific articles. Dr. Abrams served as President, Chief Executive Officer and director of AnorMED Inc. until May 2006 and as a director of Migenix Inc. until August
2008 and is currently a director for the Centre for Drug and Research Development and viDA Therapeutics Inc. and Chairman for Indel Therapeutics Inc. In 2009, Dr. Abrams joined Inimex Pharmaceuticals as President and CEO. He is also an Adjunct
Professor at the University of British Columbia. 
 Arthur M. Bruskin, Ph.D., Director. Dr. Bruskin is currently an
independent consultant in the biotechnology and pharmaceutical industry. He earned his BA and MA (Microbiology) at the University of Connecticut and his Ph.D. (Biology) at Indiana University. Following his postdoctoral training at the University of
California, San Francisco, Dr. Bruksin took a position at Applied Biotechnology (ABT), a Cambridge, MA biotechnology company where he was responsible for their cancer therapeutic program from 1987 to 1991. Following the merger of ABT with
Oncogene Science in 1991 (now OSI Pharmaceuticals (NASDAQ:OSIP)), Dr. Bruksin held a variety of positions at OSI including Executive Vice President, Global Research. Dr. Bruskin was responsible for all of OSI’s preclinical research in
the areas of Oncology and Diabetes and was involved in the discovery and development of Tarceva. After leaving OSI in 2002, Dr. Bruskin has been the Chief Scientific Officer of Interpath Pharmaceuticals Inc. (2005-2006) and the Chief Operating
Officer of Eutropics Pharmaceuticals Inc. (2006-2008) and part-time Chief Scientific Officer at America Stem Cell, Inc., a privately held biotechnology company (2009-2010). 

Kenneth Galbraith, C.A., Director. Mr. Galbraith is currently a General Partner at Ventures West. He joined Ventures West in 2007 and
leads the firm’s biotechnology practice. Prior to joining Ventures West, Mr. Galbraith was Chairman and Interim CEO of AnorMED, a biopharmaceutical company focused on new therapeutic products in hematology, HIV and oncology, until its sale
to Genzyme Corp. in a cash transaction worth almost US$600 million. Previously, Mr. Galbraith spent 13 years in senior management with QLT Inc., a global biopharmaceutical company specializing in developing treatments for eye diseases, retiring
in 2000 from his position as Executive VP and CFO. Mr. Galbraith was a founding Director of the BC Biotechnology Alliance and served as Chairman of the Canadian Bacterial Diseases Network, one of Canada’s federally-funded Networks for
Centers of Excellence (NCE). He was also a Director of the Michael Smith Foundation for Health Research and the Fraser Health Authority. He currently serves on the Board of Directors of a number of private biotechnology companies as well as the
Vancouver Aquarium Marine Science Centre, one of the world’s leading aquariums and Genome BC and has previously served on the Board of Directors of a number of Nasdaq-listed biotechnology companies, including Cardiome Pharma and Angiotech
Pharmaceuticals. Mr. Galbraith earned a Bachelor of Commerce (Honours) degree from the University of British Columbia and is a Chartered Accountant. 

Donald Jewell, C.A., Director. Mr. Jewell is a Chartered Accountant with over 30 years of business experience. Mr. Jewell spent
20 years with KPMG and at the time of his departure, he was the managing partner in charge of KPMG’s management consulting practice in British Columbia. Until March 2010 Mr. Jewell was Chairman of Cal Investments Limited, a London based
hedge fund. Mr. Jewell is currently the managing director of a private Canadian holding company; Trustee of a two substantial Canadian private trusts; and on the Board of the trusts’ major operating companies. He is also on the Board of
Directors of Lantic Inc. 
 Frank Karbe, Director. Mr. Karbe is currently the Executive Vice President and Chief Financial
Officer of Exelixis, Inc., a Nasdaq-listed biotechnology company. Prior to joining Exelixis in 2004, Mr. Karbe worked as an investment banker for Goldman Sachs & Co., where he served most recently as Vice President in the healthcare
group focusing on corporate finance and mergers and acquisitions in the biotechnology industry. Prior to joining Goldman Sachs in 1997, Mr. Karbe held various positions in the finance department of The Royal Dutch/Shell Group in Europe.
Mr. Karbe holds a Diplom Kaufmann from the WHU—Otto Beisheim Graduate School of Management, Koblenz, Germany (equivalent to a U.S. Masters of Business Administration). 

 

 - 7 - 

 R. Ian Lennox, M.B.A., Director. Mr. Lennox is currently Chairman and CEO of Ricerca
Biosciences, LLC, a contract research organization for the pharmaceutical industry and he is also director of several life sciences companies in North America. From 2000 to 2004, Mr. Lennox held leadership positions at MDS Inc.
(“MDS”), first as president and chief executive officer, drug discovery and development, and later as president and chief executive officer, pharmaceutical and biotechnology markets. Prior to joining MDS, Mr. Lennox was president and
chief executive officer of Phoenix International Life Sciences, a NASDAQ Stock Exchange company, and chairman and chief executive officer of Drug Royalty Corporation, a Toronto Stock Exchange listed company. From 1978 to 1997, Mr. Lennox held
progressively senior managerial positions at Monsanto Company in the U.S., Europe and Latin America, including six years as president and chief executive officer of Monsanto (Canada), based in Toronto. Mr. Lennox has also served as director of
a number of life sciences companies and charitable foundations in North America. Mr. Lennox holds an Honours B.S. degree in physiology and pharmacology and an M.B.A. from the University of Western Ontario. He has also completed the executive
management program in finance at the Columbia School of Business. 
 To the knowledge of management, no proposed director is, at
the date hereof, or has been, within ten years before the date hereof, a director, chief executive officer or chief financial officer of any company that: (i) was subject to a cease trade order or similar order, or an order that denied the
relevant company access to any exemption under securities legislation, that was in effect for a period of more than 30 consecutive days, that was issued while the proposed director was acting in the capacity as director, chief executive officer or
chief financial officer; or (ii) was subject to a cease trade or similar order, or an order that denied the relevant company access to any exemption under securities legislation, that was in effect for a period of more than 30 consecutive days,
that was issued after the proposed director ceased to be a director, chief executive officer or chief financial officer and which resulted from an event that occurred while that person was acting in the capacity as director, chief executive officer
or chief financial officer. 
 Other than as disclosed below, to the knowledge of management, no proposed director or a holding
company of such proposed director: (i) is, as at the date hereof, or has been within ten years before the date hereof, a director or executive officer of any company that, while that person was acting in that capacity, or within a year of that
person ceasing to act in that capacity, became bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or was subject to or instituted any proceedings, arrangement or compromise with creditors or had a receiver, receiver
manager or trustee appointed to hold its assets; or (ii) has, within the ten years before the date hereof, become bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency, or become subject to or instituted any
proceedings, arrangement or compromise with creditors, or had a receiver, receiver manager or trustee appointed to hold assets of the proposed director. Certain of the investee companies that Dr. Daniel Kisner served on the board of directors
in Dr. Kisner’s capacity as representative of Aberdare Ventures became bankrupt, made a proposal under legislation relating to bankruptcy or insolvency or were subject to or instituted proceedings, arrangements or compromises with
creditors or had a receiver, receiver manager or trustee appointed to hold its assets. 
 Other than as disclosed below, to the
knowledge of management, no proposed director or a holding company of such proposed director has been subject to: (i) any penalties or sanctions imposed by a court relating to securities legislation or by a securities regulatory authority or
has entered into a settlement agreement with a securities regulatory authority; or (ii) any other penalties or sanctions imposed by a court or regulatory body that would likely be considered important to a reasonable securityholder in deciding
whether to vote for a proposed director. Mr. Ian Lennox entered into a settlement agreement with the Ontario Securities Commission (“OSC”) in March 2006 with regard to his purchase in the market of 25,000 shares of Labopharm Inc.
while he was a director of Labopharm. The purchase was made outside a Labopharm imposed blackout period and Mr. Lennox properly filed all insider trading reports. Subsequent to the share purchase, Labopharm entered into a licensing agreement.
The possibility of entering into such agreement had been discussed with the Labopharm board before Mr. Lennox made his share purchases. Mr. Lennox initiated contact with the OSC on the matter and cooperated fully with OSC staff.

 EXECUTIVE COMPENSATION 

The following disclosure sets out the compensation for the Company’s Named Executive Officers and directors for the financial year
ended December 31, 2009. For the purposes herein, the “Named Executive Officers” are the Company’s Chief Executive Officer, Chief Financial Officer, Chief Scientific Officer, Vice President of Pharmaceutical Development and Vice
President of Strategic Planning and Business Development of the Company, as indicated in the “Summary Compensation Table” below. 
  

 - 8 - 

 Compensation Discussion and Analysis 

Principles, Components and Policies 

The Executive Compensation and Human Resources Committee (the “Compensation Committee”) is responsible for recommending the
compensation of the Company’s executive officers to the Board of Directors. In establishing compensation levels for executive officers, the Compensation Committee seeks to accomplish the following goals: 

 

	 	•	 	 to recruit and subsequently retain highly qualified executive officers by offering overall compensation which is competitive with that offered for
comparable positions in other biotechnology companies; 

  

	 	•	 	 to motivate executives to achieve important corporate and personal performance objectives and reward them when such objectives are met; and

  

	 	•	 	 to align the interests of executive officers with the long-term interests of Shareholders through participation in the Company’s share option plan
(“Share Option Plan”). 

 Currently, the Company’s executive compensation package consists of
the following components: base salary, discretionary annual incentive cash bonuses, long-term incentives in the form of share options and health and retirement benefits generally available to all employees of the Company. The Company has not granted
any share appreciation rights to its directors and officers. The Company has established the above components for its executive compensation package because it believes a competitive base salary and opportunity for annual cash bonuses are required
to retain key executives and participation in the Share Option Plan enables the the Company’s executive officers to participate in the long term success of the Company and aligns their interests with Shareholders. Additional details on the
compensation package for Named Executive Officers are described in the following sections. 
 Base Salary: The
Named Executive Officers are paid a salary in order to ensure that the compensation package offered by the Company is in line with that offered by other comparable companies in the biotechnology industry, and as an immediate means of rewarding the
Named Executive Officer for efforts expended on behalf of the Company. Base salaries for Named Executive Officers are evaluated against the responsibilities inherent in the position held and the individual’s experience and past performance.
Base salaries for Dr. Murray, Mr. Mortimer, Dr. MacLachlan and Dr. Lutwyche were established as part of the business combination negotiations completed in May 2008, while keeping in mind base salaries for similar positions in the
biotechnology marketplace although no formal compensation survey was completed in 2008. Effective January 1, 2009 the base salary of Dr. Murray was increased by 6% to $345,000 and Dr. Lutwyche’s salary was increased 11% to
$205,000. Mr. Mortimer’s and Dr. MacLachlan’s base salaries remained unchanged. 
 Annual Incentive
Cash Bonuses. The Board approves annual corporate objectives and these, along with personal performance goals, are used by the Compensation Committee for the purpose of determining recommendations to the Board on annual incentive bonuses,
giving due consideration to the Company’s stage of development. The Company paid no cash bonuses to Named Executive Officers in fiscal 2008, in order to conserve the cash resources of the Company given the market conditions at that time and
taking into consideration the total compensation of the Named Executive Officers. Starting in 2009, the Company changed its policy of reviewing performance and paying bonuses only at year end to a policy of paying bonuses if and when the Company
achieves major objectives. Cash bonus payments are at the full discretion of the Board. The Company’s objectives for 2009, as established by the Board included, filing an Investigational New Drug (IND) application for ApoB SNALP; advancing PLK1
SNALP toward clinical development; selecting a third product candidate; supporting the Company’s pharmaceutical partners by providing research, development and manufacturing services; and, maintaining a strong cash position. For 2009,
Dr. Murray, Mr. Mortimer and Dr. MacLachlan were eligible to earn cash bonuses of up to 50% of their respective base salaries. For 2009, Dr. Lutwyche and Ms. Mullarky were eligible to earn cash bonuses of up to 35% of their
respective base salaries. The Compensation Committee recommended, and the Board approved, the payment of 60% of the maximum bonus for 2009 in May 2009 following the completion of two major corporate objectives: filing an IND application for ApoB
SNALP and signing a product development agreement with Roche. There were no further bonuses paid or payable with respect to 2009. 
  

 - 9 - 

 Long-Term Incentives - Share Options. Share options are granted to reward
individuals for current performance, expected future performance and to align the long term interest of Named Executive Officers with Shareholders. Share options are generally granted in December of each year as part of the annual compensation
review. The number of share options granted to Named Executive Officers is based on performance during the current year and expectations of the future needs of the Company. Mr. Mortimer was granted 30,000 options on April 1, 2008. These
options were the 2007 end of year annual options that could not be granted until Tekmira’s share trading black-out was lifted following the announcement of the business combination with Protiva. Mr. Mortimer was also awarded 40,000 options
on April 1, 2008 in recognition of his long-standing service to the Company. Following the announcement of the business combination of Tekmira and Protiva, additional options were granted to Dr. Murray, Mr. Mortimer and
Dr. MacLachlan. Mr. Mortimer was granted a further 350,000 options on April 1, 2008 concurrent with the announcement of the business combination and Drs. Murray and MacLachlan were each granted 150,000 options on August 31, 2008
upon signing new employment agreements. These share option grants were determined and approved by all independent Directors based on the need to retain key Named Executive Officers to lead the new organization after the business combination of
Tekmira and Protiva. The Named Executive Officers were also granted share options in December 2008 based on corporate and individual performance and the needs of the Company for the upcoming fiscal year. 

The Company was in a share trading black-out at the end of 2009 so was not able to grant share options at that time. In January 2010,
once the share trading black-out had been lifted, the Company granted 125,000 options to Dr. Murray and 80,000 options to each of Mr. Mortimer, Dr. MacLachlan and Dr. Lutwyche. Ms. Mullarky did not receive any options in
January 2010 as Ms. Mullarky’s employment with the Company ended in January 2010. These share option grants were recommended by the Compensation Committee and approved by independent Directors based on based on corporate and individual
performance and the needs of the Company for fiscal 2010. 
 Performance Graph 

The following graph compares the cumulative shareholder return on an investment of $100 in the Common Shares of the Company at the date of
listing of the Company on the TSX with a cumulative total shareholder return on the S&P/TSX Composite Total Return Index. The Company commenced trading on the TSX on May 1, 2007. 

 

 

 During 2007, Tekmira completed a restructuring and re-focused the Company in a new technology area. As a
result, Tekmira’s share price weakened as these plans were finalized and communicated to investors. The Canadian health care and biotechnology space also underperformed the broader indices. Compensation for Named Executive Officers in 2007
increased based on the achievement of business objectives, including a re-financing and re-focusing of the Company in the RNA interference field, as well as advanced discussions with Protiva to combine the businesses of the two companies.

  

 - 10 - 

 The Protiva business combination was completed in May 2008 concurrent with a private
placement with two pharmaceutical companies at a significant premium to the Company’s share price. The business combination with Protiva was a transformative event for the Company as it brought together significant intellectual property,
pharmaceutical partnerships, cash and scientific expertise to advance the Company through its next stage of development. The Protiva transaction resulted in a change in the Company’s President and CEO and the addition of Dr. Ian MacLachlan
as the Company’s Executive Vice President and Chief Scientific Officer and Dr. Peter Lutwyche as the Company’s Vice President, Pharmaceutical Development. The compensation of the Named Executive Officers for 2008 was negotiated as
part of the business combination between Protiva and Tekmira to ensure key executives were retained to integrate the two companies and execute the business plan of the new company. The overall compensation for the Named Executive Officers increased
in 2008 due to the newly created position of Chief Scientific Officer and an increase in base salary of the Company’s Chief Financial Officer concurrent with the closing of the business combination with Protiva. The base salary of the CEO
decreased after the business combination with Protiva. The weakness in the share price since the completion of the business combination has been in-line with the broader market indices and the deterioration of global equity markets and the general
economy. No cash bonuses were paid to the Named Executive Officers in 2008 based on the desire to preserve cash until the financial markets improved. 

Effective January 1, 2009 Drs. Murray and Lutwyche both received $20,000 pay increases to their base salaries to $345,000 and
$205,000 respectively reflecting lower starting salaries following the business combination with Protiva. Dr. MacLachlan and Mr. Mortimer did not receive any increase in salary in 2009. The Company’s share price improved 145% in 2009
as compared to a 31% improvement in the S&P/TSX Composite index. The improvement in the Company’s share price reflects the achievement of a number of major corporate objectives in 2009. As discussed above the Named Executive Officers were
paid 60% of their maximum bonuses in 2009. 
 Summary Compensation Table 

The following table sets out the compensation paid, payable or otherwise provided to the Company’s Named Executive Officers during
the Company’s two most recently completed financial years ending on December 31. All amounts are expressed in Canadian dollars unless otherwise noted. 
  

													
	 Name and principal position
	  	Year	  	Salary
($)	  	Option-based
awards(1)

($)	  	Annual
incentive 
cash
bonuses (2)
($)	  	All
other
Compensation (3)
($)
	  	Total
compensation

($)
							
	Dr. Mark J.
Murray(4)	  	2009	  	345,000	  	—  	  	103,500	  	90,237	  	538,737
	President and Chief Executive Officer	  	2008	  	189,583	  	168,646	  	—  	  	14,727	  	372,956
							
	Ian C. Mortimer	  	2009	  	285,000	  	—  	  	85,500	  	133,550	  	504,050
	Executive Vice President, Finance and Chief Financial Officer	  	2008	  	260,313	  	448,391	  	—  	  	7,909	  	716,613
							
	Dr. Ian
MacLachlan(5)	  	2009	  	285,000	  	—  	  	85,500	  	8,550	  	379,050
	Executive Vice President and Chief Scientific Officer	  	2008	  	166,250	  	153,867	  	—  	  	7,520	  	327,637
							
	Dr. Peter
Lutwyche(6)	  	2009	  	205,000	  	—  	  	43,050	  	6,150	  	254,200
	Vice President of Pharmaceutical Development	  	2008	  	107,917	  	29,599	  	—  	  	4,963	  	142,479
							
	Tammy L.
Mullarky(7)	  	2009	  	232,540	  	—  	  	47,126	  	6,976	  	286,642
	Vice President of Strategic Planning and Business Development	  	2008	  	70,354	  	74,206	  	—  	  	2,078	  	146,638

 Notes: 

 

	(1)	The fair value of each option is estimated as at the date of grant using the most widely accepted option pricing model, Black-Scholes. The weighted average option
pricing assumptions and the resultant fair values for options awarded in 2008 are as follows: expected average option term of eight years; a zero dividend yield; a weighted average expected volatility of 117.4%; and, a weighted average risk-free
interest rate of 2.95%. No option-based awards were issued to the Named Executive Officers during the year ended December 31, 2009. 

  

 - 11 - 

	(2)	No bonuses were awarded to the Named Executive Officers in 2008. The Executive Compensation and Human Resources Committee approved the payment of 60% of the available
bonus pool during 2009. 

	(3)	All other compensation includes RRSP or equivalent matching payments of the lower of 3% of salary and 50% of the maximum annual contribution allowed by the Canada
Revenue Agency. All full-time employees and executives of the Company are eligible for RRSP or equivalent matching payments. In 2009 Dr. Murray also received a tax gross-up payment of $46,425 in respect of his earnings prior to the business
combination with Protiva. Under Dr. Murray’s previous employment agreement, which was replaced effective May 30, 2008 following the business combination with Protiva, he was eligible for a tax gross-up payment which ensures that he is
no worse off as a result of paying taxes on his earnings from the Company in Canada as compared to if he had worked and paid taxes only in the United States. The payment was calculated and paid in 2009 once Dr. Murray had filed his 2008 US and
Canadian tax returns. Dr. Murray’s employment agreement with Tekmira, effective May 30, 2008, does not include a tax gross-up clause. Dr. Murray’s and Dr. MacLachlan’s other compensation also includes amounts
claimed under their contractual entitlement to reimbursement of any health expenses incurred, including their families’ health expenses, that are not covered by insurance. On May 31, 2009, a year and a day after the business combination
with Protiva, Mr. Mortimer received a one time retention bonus of $125,000. 

	(4)	Dr. Murray entered into an employment agreement with Tekmira after completion of the business combination with Protiva effective May 30, 2008. Under this
agreement, Dr. Murray earned a salary of $189,583 in 2008 which is a base salary of $325,000 on an annualized basis. Effective January 1, 2009 Dr. Murray’s annual salary was increased to $345,000. Dr. Murray’s
compensation is earned in Canadian dollars but is converted to US dollars before payment using the Bank of Canada’s exchange rate as at the end of the month prior to the month of payment. 

	(5)	Dr. MacLachlan entered into an employment agreement with Tekmira after completion of the business combination with Protiva effective May 30, 2008. Under this
agreement, Dr. MacLachlan earned a salary in 2008 of $166,250 which is a base salary of $285,000 on an annualized basis. 

	(6)	In 2008 Dr. Lutwyche earned a salary of $107,917 which is a base salary of $185,000 on an annualized basis. Effective January 1, 2009,
Dr. Lutwyche’s annual salary was increased to $205,000. 

	(7)	Ms. Mullarky’s annual base salary in 2008 and 2009 was US$195,000, was paid in US dollars and was converted into Canadian dollars for reporting purposes using
the Bank of Canada’s exchange rate as at the end of the month prior to the month of payment. Ms. Mullarky’s employment with the Company commenced in September 2008 and ended in January 2010. 

Option Based Awards 

Share options are generally awarded to executive officers at commencement of employment and periodically thereafter after taking into
consideration, among other things, the number of share options held by an executive officer. See “Securities Authorized for Issuance Under Equity Compensation Plans” for a description of the Share Option Plan. Options are generally granted
to corporate executives in December of each year as part of the annual compensation review. Any special compensation other than cash bonuses is typically granted in the form of options. Options are granted at other times of the year to individuals
commencing employment with the Company or in special circumstances. The exercise price for the options is the closing price of the Common Shares on the last trading day before the grant of the option. 

 

 - 12 - 

 Executive Incentive Plan Awards - Outstanding Option-based Awards 

The following table sets out all option-based awards and share-based awards outstanding as at December 31, 2009, for each Named
Executive Officer: 
  

									
	 	  	Option-based Awards
	 Name
	  	Number of securities
underlying 
unexercised
options
(#)	  	Option
exercise 
price
($)	  	 Option expiration

date
	  	Value 
of
unexercised
in-the-money
options 
(1)
($)
	 Dr. Mark Murray
(2)
	  	2,161	  	0.09	  	November 19, 2010	  	1,818
		  	709	  	0.09	  	December 31, 2010	  	596
		  	10,532	  	0.09	  	January 22, 2011	  	8,859
		  	135	  	0.09	  	February 16, 2011	  	114
		  	358	  	0.09	  	April 30, 2011	  	301
		  	270	  	0.09	  	June 3, 2011	  	227
		  	1,350	  	0.09	  	July 16, 2011	  	1,136
		  	135	  	0.09	  	July 23, 2011	  	114
		  	74,864	  	0.09	  	August 30, 2011	  	62,971
		  	135	  	0.09	  	December 19, 2011	  	114
		  	405	  	0.09	  	January 22, 2012	  	341
		  	135	  	0.09	  	June 8, 2012	  	114
		  	135	  	0.09	  	July 23, 2012	  	114
		  	40,964	  	0.09	  	July 29, 2012	  	34,456
		  	1,097,141	  	0.09	  	September 12, 2015	  	922,841
		  	135,033	  	0.09	  	March 1, 2018	  	113,581
		  	150,000	  	0.93	  	August 30, 2018	  	0
		  	125,000	  	0.36	  	December 8, 2018	  	71,250
					
	 Ian C. Mortimer
	  	15,000	  	1.40	  	December 14, 2014	  	0
		  	75,000	  	0.62	  	July 25, 2015	  	23,250
		  	50,000	  	1.08	  	March 28, 2016	  	0
		  	75,000	  	0.60	  	August 2, 2016	  	24,750
		  	50,000	  	1.30	  	August 6, 2017	  	0
		  	420,000	  	1.12	  	March 31, 2018	  	0
		  	55,000	  	0.36	  	December 8, 2018	  	31,350
					
	 Dr. Ian MacLachlan
	  	150,000	  	0.93	  	August 30, 2018	  	0
		  	80,000	  	0.36	  	December 8, 2018	  	45,600
					
	 Dr. Peter Lutwyche
	  	90,000	  	0.36	  	December 8, 2018	  	51,300
					
	 Tammy L. Mullarky
	  	100,000	  	0.81	  	September 14, 2018	  	12,000

 Notes: 

 

	(1)	This amount is based on the difference between Tekmira’s year end share price of $0.93 and the exercise price of the option. 

	(2)	Dr. Murray holds options to purchase 404,187 common shares of Protiva, a wholly-owned subsidiary of Tekmira, with an exercise price of $0.30. As part of the
business combination between Tekmira and Protiva, Tekmira agreed to issue 1,364,462 common shares of Tekmira on the exercise of these stock options giving an effective cost per Tekmira stock option of $0.09. The shares reserved for issue on the
exercise of the Protiva options are equal to the number of Tekmira common shares that would have been issued if the options had been exercised before the completion of the business combination and the shares issued on exercise of the options had
then been exchanged for Tekmira common shares. See “Securities Authorized for Issuance Under Equity Compensation Plans – Additional Shares Subject to Issue”. 

 

 - 13 - 

 Executive Incentive Plan Awards – Value Vested During the Year 

The aggregate value of executive options vesting during the year ended December 31, 2009 measured at their date of vesting by
comparing option exercise price to closing market price on that day was: 
  

			
	 Name
	  	Option-based awards – Value vested during the 
year
($)
	 Dr. Mark J. Murray
	  	24,062
	 Ian C. Mortimer
	  	45,787
	 Dr. Ian MacLachlan
	  	18,100
	 Dr. Peter Lutwyche
	  	11,925
	 Tammy L. Mullarky
	  	7,000

 Pension Plans 

The Company has no pension or deferred compensation plans for its Named Executive Officers. 

Termination and Change of Control Benefits 

The following table provides information concerning the value of payments and benefits following the termination of employment of the
Named Executive Officers under various circumstances. Payments vary based on the reason for termination and the timing of a departure. The below amounts are calculated as if the Named Executive Officer’s employment had been terminated on
December 31, 2009. Receipt of payments on termination is contingent on the Named Executive Officer delivering a release to Tekmira. 
  

																
	 Payment Type
	  	Dr. Mark J.
Murray	  	Dr. Ian
MacLachlan	  	Ian C.
Mortimer	  	Dr. Peter
Lutwyche	  	Tammy
L.
Mullarky(1)
	
	Involuntary Termination by Tekmira for cause or upon death
						
	 Cash payment
	  	$	0	  	$	0	  	$	0	  	$	0	  	$	0
	 Option values
(2)
	  	$	1,183,319	  	$	22,800	  	$	63,675	  	$	25,650	  	$	6,000
	 Benefits
(3)
	  	$	0	  	$	0	  	$	0	  	$	0	  	$	0
						
	Involuntary Termination by Tekmira without cause or by Executive with good reason
(3)	  			  			  			  			  		
						
	 Cash payment
	  	$	1,035,000	  	$	855,000	  	$	855,000	  	$	119,583	  	$	119,551
	 Option values
(5)
	  	$	1,218,944	  	$	45,600	  	$	79,350	  	$	51,300	  	$	12,000
	 Benefits
(3)
	  	$	164,742	  	$	35,102	  	$	35,102	  	$	8,740	  	$	12,779

 Notes: 

 

	(1)	Tammy Mullarky’s position at the Company ended on January 15, 2010. Upon signing a release, Ms. Mullarky was paid severance of $119,551 (US$113,750
converted, for reporting purposes, using the Bank of Canada’s December 31, 2009 rate) and benefits with a total value of $12,779 will be paid. There was no further vesting of Ms. Mullarky’s stock options which were not
subsequently exercised and were forfeited on February 14, 2010. 

	(2)	This amount is based on the difference between Tekmira’s year end share price of $0.93 and the exercise price of the options that were vested as at
December 31, 2009. 

	(3)	Ongoing benefit coverage has been estimated assuming that benefits will be payable for the full length of the severance period which would be the case if new employment
was not taken up during the severance period. Benefits include RRSP or equivalent matching payments and extended health and dental coverage that is afforded to all of the Company’s full time employees. Dr. Murray’s benefits also
include a $2,000,000 life insurance policy, the reimbursement of up to $10,000 per annum in professional fees related to the filing of his tax return(s). Dr. Murray and Dr. MacLachlan’s benefits also include an estimate of the costs
of reimbursement of health expenses incurred, including their families’ health expenses, that are not covered by insurance. 

  

 - 14 - 

	(4)	Paid in circumstances of the Named Executive Officer departing for “good reason”, which includes an adverse change in the Named Executive Officer’s
duties or responsibilities or a reduction in compensation and benefits. 

	(5)	This amount is based on the difference between Tekmira’s year end share price of $0.93 and the exercise price of the options that were vested as at
December 31, 2009 and options that would vest during the severance period. 

 Director Compensation 

The Board of Directors has adopted formal policies for compensation of non-executive directors. In order to align the interests of
directors with the long-term interests of Shareholders, the directors have determined that the most appropriate form of payment for their services as directors is through participation in the Share Option Plan as well as an annual cash retainer and
fees for meeting attendance. Directors who also serve as management of the Company receive no additional consideration for acting as a director. 

The Board has adopted a policy that non-executive directors are granted options upon appointment as a director and are eligible for
annual grants thereafter. Following the business combination with Protiva, the Board reviewed its fee schedule and effective September 1, 2008, adopted the following fee schedule: an annual cash retainer of US$18,000 per annum (US$25,500 for
the Chairman of the Board; an additional US$5,000 for the Chairman of the Audit Committee; an additional US$2,500 for members of the Audit Committee; and an additional US$2,500 for the Chairman of any other Board constituted committees) and meeting
fees of US$500 to US$1,750. The fee schedule was adjusted to increase the annual retainer and lower per meeting fees in line with companies comparable to Tekmira which lowered the overall cash compensation on an annual basis. 

Non-executive directors earned cash compensation of $261,271 in 2009 as annual retainer and meeting attendance fees. The Company also,
reimburses directors for expenses they incur on behalf of the Company, including attending meetings of the Board. 
 The
compensation provided to the directors, excluding Dr. Murray who is included in the Named Executive Officer disclosure above, for the Company’s most recently completed financial year of December 31, 2009 is: 

 

							
	 Name
	  	Fees earned
($)	  	Option-based
awards 
(1)
($)	  	Total
($)
	 K. Michael Forrest (former Chairman of the Board)
(2)

	  	45,391	  	—  	  	45,391
	 Michael J. Abrams
	  	40,069	  	—  	  	40,069
	 Arthur M. Bruskin
	  	30,252	  	—  	  	30,252
	 Gary E. Frashier
	  	35,257	  	—  	  	35,257
	 James W. Hudson (Audit Committee Chair)
	  	40,309	  	—  	  	40,309
	 Don Jewell
	  	32,525	  	—  	  	32,525
	 R. Ian Lennox
	  	37,468	  	—  	  	37,468

 Notes: 

 

	(1)	No option-based awards were issued to the directors during the year ended December 31, 2009. 

	(2)	Mr. Forrest resigned as a director on January 28, 2010. 

  

 - 15 - 

 Director Incentive Plan Awards 

Outstanding Option-based Awards and Share-based Awards 
  

									
	 	  	Option-Based Awards
	 Name
	  	Number of 
securities
underlying
unexercised 
options
(#)	  	Option 
exercise
price
($)	  	 Option expiration

date
	  	Value 
of
unexercised
in-the-money
options 
(1)
($)
	 K. Michael Forrest
(2)
	  	7,500	  	1.40	  	December 14, 2014	  	0
		  	12,500	  	1.08	  	March 28, 2016	  	0
		  	25,000	  	0.60	  	August 2, 2016	  	8,250
		  	25,000	  	1.30	  	August 6, 2017	  	0
		  	60,000	  	1.12	  	March 31, 2018	  	0
		  	25,000	  	0.36	  	December 8, 2018	  	14,250
					
	 Michael J. Abrams
(3)
	  	3,376	  	0.09	  	January 22, 2011	  	2,836
		  	3,376	  	0.09	  	January 22, 2012	  	2,836
		  	3,376	  	0.09	  	January 21, 2013	  	2,836
		  	3,376	  	0.09	  	January 21, 2014	  	2,836
		  	3,376	  	0.09	  	January 22, 2015	  	2,836
		  	85,218	  	0.09	  	September 12, 2015	  	71,583
		  	27,226	  	0.09	  	December 31, 2015	  	22,870
		  	3,376	  	0.09	  	April 3, 2017	  	2,836
		  	67,516	  	0.09	  	May 27, 2017	  	56,713
		  	25,000	  	0.36	  	December 8, 2018	  	14,250
					
	 Arthur M. Bruskin
	  	20,000	  	1.12	  	March 31, 2018	  	0
		  	25,000	  	0.36	  	December 8, 2018	  	14,250
					
	 Gary E. Frashier
	  	7,500	  	1.40	  	December 14, 2014	  	0
		  	12,500	  	1.08	  	March 28, 2016	  	0
		  	25,000	  	0.60	  	August 2, 2016	  	8,250
		  	25,000	  	1.30	  	August 6, 2017	  	0
		  	45,000	  	1.12	  	March 31, 2018	  	0
		  	25,000	  	0.36	  	December 8, 2018	  	14,250
					
	 James W. Hudson
	  	7,500	  	1.40	  	December 14, 2014	  	0
		  	12,500	  	1.08	  	March 28, 2016	  	0
		  	25,000	  	0.60	  	August 2, 2016	  	8,250
		  	25,000	  	1.30	  	August 6, 2017	  	0
		  	45,000	  	1.12	  	March 31, 2018	  	0
		  	25,000	  	0.36	  	December 8, 2018	  	14,250
					
	 Don Jewell
	  	25,000	  	0.36	  	December 8, 2018	  	14,250
					
	 R. Ian Lennox
	  	25,000	  	0.36	  	December 8, 2018	  	14,250

 Notes: 

 

	(1)	This amount is based on the difference between Tekmira’s year end share price of $0.93 and the exercise price of the option. 

	(2)	Mr. Forrest resigned as a director on January 28, 2010. 

	(3)	All of Dr. Abrams’s options with an exercise price of $0.09 were granted to Dr. Abrams as a Director of Protiva. The shares reserved for these options
are equal to the number of Tekmira common shares that would have been received if the options had been exercised prior to the business combination and subsequently exchanged for Tekmira common shares such that Dr. Abrams will receive Temkira
common share upon exercise of these options. 

 Director options are priced at the closing market price of the
previous trading day and vest immediately upon granting. The Company typically grants options to director at the time of their first appointment to the Board and then on an annual basis at the end of the fiscal year. The Company was in a share
trading black-out at the end of 2009 so was not able to grant share options at the end of the fiscal year. In January 2010, once the share trading black-out had been lifted, the Company granted 25,000 share options to each of the directors except
for the newly appointed Chairman, Dr. Daniel Kisner, who was granted 50,000 share options. 
  

 - 16 - 

 CORPORATE GOVERNANCE 

The Board of Directors of the Company believe that sound corporate governance practices are essential to the well being of the Company
and its Shareholders, and that these practices should be reviewed regularly to ensure they are appropriate. The Board of Directors continues to further its commitment to corporate governance by ensuring that all corporate governance documents are
current, including the following documents: 
  

	 	•	 	 Audit Committee Charter; 

  

	 	•	 	 Corporate Governance and Nominating Committee Charter; 

 

	 	•	 	 Executive Compensation and Human Resource Committee Charter; and 

 

	 	•	 	 Corporate Governance Guidelines. 

In 2005, the Company’s predecessor, Inex, implemented whistleblower procedures and posted the procedures on its website. Tekmira
adopted these procedures when it acquired the business of Inex. With respect to monitoring compliance with the Company’s Code of Business Conduct and Code of Ethics for Senior Financial Officers the Company’s employees signed a declaration
confirming that they had read and understood the codes. Employees are periodically re-trained on the Code. A copy of these codes can be found on SEDAR at www.sedar.com. 

The Corporate Governance and Nominating Committee met on March 26, 2010 to review the Company’s current slate of directors and
recommend directors for election to the Board. 
 The following disclosure was approved by the Board of Directors on
May 12, 2010. 
 Board of Directors 

The Board of Directors is responsible for supervising the management of the business and affairs of the Company. The Board establishes the
overall policies and standards for the Company and monitors and evaluates the Company’s strategic direction and retains plenary power for those functions not specifically delegated by it to management. The Board approves plans as well as major
transactions such as strategic alliances, acquisitions and financings. 
 The directors are kept informed of the Company’s
operations at meetings of the Board and its committees and through reports and analyses provided by management. The Board meets on a quarterly, regularly scheduled basis and more frequently as required. In the year ended December 31, 2009, the
Board formally met five times. In addition, informal communications between management and directors occur apart from regularly scheduled Board and committee meetings. At each regularly held quarterly Board meeting, the Board’s independent
directors held an in camera session without the presence of non-independent directors and members of management. 
 Certain of
the directors and senior officers of the Company are employed by or affiliated with organizations which have entered into research agreements with the Company. As disputes may arise between these organizations and the Company, or certain of these
organizations may undertake or have undertaken research with competitors of the Company, there exists the possibility for such persons to be in a position of conflict. However, these persons have a duty to deal fairly and in good faith with the
Company and such other organizations in making any decision or recommendation involving the Company. In addition, as applicable, such directors and officers will refrain from voting on any matter in which they have a conflict of interest.

 A majority of the members of the Board of Directors (including Dr. Daniel Kisner, the Chairman of the Board effective
January 28, 2010) are independent directors, and thus the Board is able to act independently from management. The Board is currently comprised of ten persons, and Shareholders are being asked at the Meeting to elect eight directors as
Mr. James Hudson and Mr. Gary Frashier are not standing for re-election at the Meeting. Of the current 10 members of the Board, nine are independent directors. The Board is responsible for determining whether or not each director is an
independent director. In doing so, the Board analyses all relationships of the 
  

 - 17 - 

 
directors with the Company and its subsidiaries. Directors are considered to be independent if they have no direct or indirect material relationship with the Company. A “material
relationship” is a relationship which could, in the view of the Board, be reasonably expected to interfere with the exercise of a director’s independent judgment. 

The following table outlines the Company’s independent and non-independent directors, and the basis for a determination that a
director is non-independent: 
  

			
	 Name
	  	 Independent/Non-Independent

	 Arthur M. Bruskin
	  	Independent
	 James W. Hudson
	  	Independent
	 Gary E. Frashier
	  	Independent
	 R. Ian Lennox
	  	Independent
	 Daniel Kisner
	  	Independent
	 Don Jewell
	  	Independent
	 Michael J. Abrams
	  	Independent
	 Frank Karbe
	  	Independent
	 Kenneth Galbraith
	  	Independent
	 Mark J. Murray
	  	Non-Independent
		
		  	Basis for determination: Dr. Murray is the Company’s President and Chief Executive Officer.

While there is no specific mandate for the Board, any responsibility which is not delegated to senior management or to a Board committee
remains with the entire Board. The Board approves all significant decisions that affect the Company before implementation, and supervises the implementation and reviews the results of such decisions. The Board is actively involved in the
Company’s strategic planning process. The Board discusses and reviews all materials relating to the corporate strategy with management, and is responsible for reviewing and approving the corporate strategy. Each year, at least one Board meeting
is dedicated to discussing and considering the corporate strategy, which takes into account the risks and opportunities of the business. On a quarterly basis the Board also reviews progress on annual corporate objectives. Management must seek the
Board’s approval for any transaction that would have a significant impact on the Company. 
 The Company has put structures
in place to ensure effective communication between the Company, its stakeholders and the public. The Board approves all the Company’s major communications, including annual reports, quarterly reports and financing documents (the “Financial
Documents”) and is provided with an opportunity to comment on material news releases. All Financial Documents are reviewed by the Company’s external auditors. In addition, all material news releases are reviewed by external legal counsel.
The Company communicates with its stakeholders through a number of channels including its web site at www.tekmirapharm.com. Shareholders can provide feedback to the Company in a number of ways, including email at imortimer@tekmirapharm.com.

 While the Company does not have specific position descriptions for the Board chair and committee chairs, their
responsibilities are outlined in the charters for the Board committees. For example, the chair of each committee is responsible for leadership of the committee, including scheduling and presiding over meetings, preparing agendas, and making regular
reports to the Board. The chair of the Audit Committee must also maintain regular liaison with the Chief Financial Officer, Chief Executive Officer and the lead external audit partner. 

The Board has clearly defined the limits to management’s authority. In doing so, the Board has directed management to: 

 

	 	•	 	 review the Company’s strategies and their implementation in all key areas of the Company’s activities; 

 

 - 18 - 

	 	•	 	 carry out a comprehensive budgeting process and monitor the Company’s financial performance against the budget; and 

 

	 	•	 	 identify opportunities and risks affecting the Company’s business and find ways of dealing with them. 

New Board members receive a director’s orientation including reports on the Company’s strategic plans, its significant
financial, accounting and risk management issues. Board meetings are periodically held at the Company’s facilities and combined with presentations by the Company’s senior management to give the directors additional insight into the main
areas of the Company’s business. 
 The Board has established three standing committees, the Audit Committee, the Executive
Compensation and Human Resources Committee and the Corporate Governance and Nominating Committee. The Board has delegated certain responsibilities to each of these committees and has also instructed each of them to perform certain advisory functions
and make recommendations and report to the Board. Where considered prudent, certain matters falling under the responsibility of these committees are at times dealt with at a meeting of the entire Board. The Board has not appointed an executive
committee of the Board. 
 Audit Committee 

The Audit Committee meets with the financial officers of the Company and the independent auditors to review and inquire into matters
affecting financial reporting matters, the system of internal accounting and financial controls and procedures, and the audit procedures and plans. The Audit Committee also makes recommendations to the Board regarding the appointment of independent
auditors. In addition, the Audit Committee reviews and recommends to the Board for approval the annual financial statements and the annual report and certain other documents including the interim financial statements required by the regulatory
authorities. The Audit Committee is also responsible for approving the policies under which the financial officers of the Company may invest the funds in excess of those required for current operations. The Audit Committee has adopted an Audit
Committee Charter, approved by the Board that reflects these and other responsibilities. The Audit Committee has also adopted a policy that requires its approval of non-audit services to be provided by the Company’s auditors. 

In its May 10, 2010 meeting, the Audit Committee reviewed its charter and determined that no changes were required. 

The Audit Committee has met formally four times in the year ended December 31, 2009. The Audit Committee is composed of
Mr. Hudson (the Audit Committee chairman), Dr. Abrams and Mr. Karbe all of whom are independent directors. As Mr. Hudson is not standing for re-election at the Meeting, the Company intends to fill Mr. Hudson’s position
as Audit Committee chairman with a member of the Board duly elected at the Meeting. 
 See “Directors and Officers –
Audit Committee”, “Directors and Officers – Pre-Approval Policies and Procedures of Non-Audit Services” and “Directors and Officers – External Auditor Service Fees” in the Company’s Annual Information Form for
the year ended December 31, 2009 (available at www.sedar.com) for more information concerning the Audit Committee and its members. 

Executive Compensation and Human Resources Committee 

The Executive Compensation and Human Resources Committee is responsible for establishing and monitoring the Company’s long range
plans and programs for attracting, retaining, developing and motivating employees. The committee reviews recommendations for the appointment of persons to senior executive positions, considers terms of employment including succession planning and
matters of compensation and recommending awards under the Share Option Plan for senior executives and independent board members. 

The Executive Compensation and Human Resources Committee met formally four times in the year ended December 31, 2009. The Committee
is composed of Mr. Lennox (the Executive Compensation and Human Resources Committee chairman), Mr. Frashier and Mr. Jewell, all of whom are independent directors. As Mr. Frashier is not standing for re-election at the Meeting,
the Company intends to fill Mr. Frashier’s position on the Executive Compensation and Human Resources Committee with a member of the Board duly elected at the Meeting. 

 

 - 19 - 

 Corporate Governance and Nominating Committee 

The purpose of the Corporate Governance and Nominating Committee is to provide support for the stewardship and governance role of the
Board by carrying out responsibilities delegated to it by the Board. 
 The Corporate Governance and Nominating Committee
operates with the mandate to: 
  

	 	•	 	 recommend qualified candidates for election as a director and to fill vacancies on the Board; 

 

	 	•	 	 annually review credentials of nominees for re-election to the Board; 

 

	 	•	 	 manage Board and committee succession planning; 

  

	 	•	 	 recommend Corporate Governance and Nominating Committee assignments for individual directors; 

 

	 	•	 	 assess the effectiveness of the Board, its committees and individual directors; and 

 

	 	•	 	 develop and recommend to the Board a set of corporate governance principles applicable to the Company. 

In making its recommendation on nominees, the Corporate Governance and Nominating Committee will consider the competencies and skills
each new nominee will bring to the Board in light of the determinations made by the Board as to (a) the competencies and skills that the Board, as a whole, should possess, and (b) the competencies and skills of each current director. New
Board nominees must have a track record in general business management, special expertise in an area of strategic interest to the Company, the ability to devote the time required, shown support for the Company’s mission and strategic
objectives, and a willingness to serve. The Corporate Governance and Nominating Committee will have the authority to retain and terminate any search firm to be used to identify director nominees, including the authority to approve the search
firm’s appropriate fees and other retention terms. 
 The Corporate Governance and Nominating Committee surveys the
directors to provide feedback on the effectiveness of the Board on an annual basis. The Corporate Governance and Nominating Committee assesses the operation of the Board and the Board committees, the adequacy of information given to directors,
communication between the Board and management and the strategic direction and processes of the Board and committees. The Corporate Governance and Nominating Committee recommends changes to enhance the performance of the Board based on the survey
feedback. 
 The Corporate Governance and Nominating Committee has adopted a Corporate Governance and Nominating Committee
Charter and Corporate Governance Guidelines. In its March 19, 2009 meeting, the Corporate Governance and Nominating Committee reviewed its charter and guidelines. 

The Corporate Governance and Nominating Committee held one formal meeting in the year ended December 31, 2009. The Corporate
Governance and Nominating Committee is composed of Mr. Galbraith (the Corporate Governance and Nominating Committee chairman), Dr. Abrams, and Mr. Frashier, all of whom are independent directors. As Mr. Frashier is not standing
for re-election at the Meeting, the Company intends to fill Mr. Frashier’s position on the Corporate Governance and Nominating Committee with a member of the Board duly elected at the Meeting. 

 

 - 20 - 

 On January 28, 2010 the Company appointed three new directors to its Board:
Dr. Daniel Kisner, Mr. Kenneth Galbraith and Mr. Frank Karbe. The newly appointed directors bring skills to match the Company’s evolution into a clinical development stage organization and to support the strategy of listing its
shares in the United States. The appointments followed an extensive search process conducted with the assistance of an external search firm. The Company wishes to retain a Board size of eight directors. Mr. Hudson and Mr. Frashier will not
be standing for re-election at the Meeting. 
 Attendance at Board and Committee Meetings 

The attendance records for the members of the Board of Directors in the year ended December 31, 2009 are as follows: 

 

					
	 	  	Number of meetings attended:
	 Director
(1)
	  	Board	  	Committees
	 K. Michael Forrest (former Chairman of the Board)
	  	5 of 5	  	5 of 5
	 Gary E. Frashier
	  	5 of 5	  	5 of 5
	 James W. Hudson
	  	5 of 5	  	4 of 4
	 Dr. Mark J. Murray
	  	5 of 5	  	n/a
	 Arthur Bruskin
	  	5 of 5	  	n/a
	 R. Ian Lennox
	  	5 of 5	  	4 of 4
	 Michael J. Abrams
	  	5 of 5	  	5 of 5
	 Don Jewell
	  	5 of 5	  	4 of 4

 Note: 

 

	(1)	Mr. Forrest resigned from the Board on January 28, 2010. 

In addition to the Company’s formal, standing committees, the Board may from time-to-time organize informal, ad-hoc committees to
address specific issues. 
 APPOINTMENT OF AUDITOR 

KPMG LLP, Chartered Accountants, P.O. Box 10426, 777 Dunsmuir Street, Vancouver, British Columbia, V7Y 1K3 will be nominated at the
Meeting for re-appointment as auditor of Tekmira. KPMG LLP has been auditor of Tekmira since April 2007. 
 SECURITIES
AUTHORIZED FOR ISSUANCE 
 UNDER EQUITY COMPENSATION PLANS 

The only ongoing equity compensation plan which the Company has in place is the Share Option Plan. This plan was approved by shareholders
of Tekmira’s predecessor corporation in January 1996, adopted by the Board in April 2007 on the transfer of the business of that predecessor corporation to Tekmira, and last amended on May 12, 2009. 

The Share Option Plan has been established to provide incentive to qualified parties to increase their proprietary interest in the
Company and thereby encourage their continuing association with the Company. The Share Option Plan is administered by the directors of the Company. The Share Option Plan provides that options will be issued to directors, officers, employees or
consultants of the Company or a subsidiary of the Company. Shareholders have approved the issuance of a maximum of 6,846,276 common shares of Tekmira under the Share Option Plan which represents approximately 13.3% of the Company’s current
issued and outstanding common shares of Tekmira. 
  

 - 21 - 

 Since January 1996, the equivalent of 412,199 common shares of Tekmira have been issued
pursuant to the exercise of options granted under the Share Option Plan (which represents approximately 0.8% of the Company’s issued and outstanding common shares), and as of April 26, 2010, there were 5,171,240 common shares of Tekmira
subject to options outstanding under the Share Option Plan (which represents approximately 10.0% of the Company’s current issued and outstanding common shares). The number of common shares of Tekmira remaining available for future grants of
options as at April 26, 2010 was 1,262,837 (which represents approximately 2.4% of the Company’s current issued and outstanding common shares). 

The following table sets out Share Option Plan information as at the end of the financial year ended December 31, 2009. 

Share Option Plan Information 
  

								
	 Equity compensation plans

approved by

securityholders
	  	Number of securities 
to
be issued upon exercise
of outstanding 
options
(“Column A Securities”)	  	Weighted-average
exercise price
of
outstanding options	  	Number of securities 
remaining
available for future
issuance
under equity compensation plans
(excluding Column A 
Securities)
	 Share Option Plan
	  	4,328,140	  	$	2.02	  	2,104,604

 Terms of the Share Option Plan

 The Share Option Plan provides that the Board of Directors may, from time to time, grant options to acquire all or part of
the shares subject to the Share Option Plan to any person who is an employee or director of the Company or any of its subsidiaries, or any other person or company engaged to provide ongoing management, financial and scientific consulting or like
services for the Company or any of its subsidiaries. The exercise price of options granted under the Share Option Plan will be determined by the directors, but will be at least equal to the closing trading price for the common shares of Tekmira on
the day before the grant date. The term of option granted may not exceed 10 years from the date of grant of the option. 

Tekmira options may not be exercised after an optionee ceases to be an eligible recipient under the Share Option Plan, except as follows:

  

	 	•	 	 in the case of death, all unvested options of the optionee will be deemed to have become fully vested immediately before death, and the personal
representatives of the optionee will be entitled to exercise the options at any time by the earlier of (a) the expiry date, and (b) the first anniversary of the date of death; 

 

	 	•	 	 in the case of retirement, all unvested options of the optionee will be deemed to have become fully vested immediately before retirement, and the
options will be exercisable by the earlier of (a) the expiry date, or (b) the first anniversary of the date of retirement; 

  

	 	•	 	 in the case of an optionee becoming unable to work due to illness, injury or disability, all option rights will vest, and the options will be
exercisable, on the same terms as if the optionee had continued to be an eligible recipient under the Share Option Plan; and 

  

	 	•	 	 in the case of an optionee resigning his office, or terminating his employment or service, or being dismissed without cause, the option rights that
have accrued to such optionee up to the time of termination will be exercisable within the 30 days after the date of termination. 

In the case of an optionee being dismissed from office, employment or service for cause, all option rights that had accrued to the
optionee to the date of termination will immediately terminate. 
 Any option granted is also subject to certain vesting
provisions, typically over three years for employees and immediate vesting for directors. Except in the case of the death of an optionee, an option may be exercisable only by the optionee to whom it is granted and may not be assigned. The Share
Option Plan does not provide for any financial assistance to Plan members in exercising their options. 
  

 - 22 - 

 As specifically provided for in the Share Option Plan, the number of common shares of
Tekmira that, under all share compensation arrangements: 
  

	 	•	 	 may be reserved for issuance to all insiders, may not exceed 10% of the common shares of Tekmira outstanding on a non-diluted basis (the
“Outstanding Issue”) at that time; 

  

	 	•	 	 may be issued to all insiders within a one-year period may not exceed 10% of the Outstanding Issue at that time; 

 

	 	•	 	 to any one insider and his or her associates, within a one-year period, may not exceed 5% of the Outstanding Issue at that time; and

  

	 	•	 	 may be reserved for issuance to non-employee directors, may not exceed 2% of the Outstanding Issue at that time (the “Non-Employee Director
Cap”). 

 The Board reserves the right, in its absolute discretion, to at any time amend, modify or
terminate the Share Option Plan. Any amendment to any provision of the Share Option Plan will be subject to any necessary approvals by shareholders and any stock exchange or regulatory body having jurisdiction over the securities of the Company.

 Shareholder approval is required for any amendment or modification to the Share Option Plan that does any of the following:

  

	 	•	 	 increases the number of common shares of Tekmira reserved for issuance under the Share Option Plan; 

 

	 	•	 	 reduces the exercise price of an option except for the purpose of maintaining option value in connection with a subdivision or consolidation of, or
payment of a dividend payable in, common shares of Tekmira or a reorganization, reclassification or other change or event affecting the common shares of Tekmira (for this purpose, cancellation or termination of an option of a Share Option Plan
participant prior to its expiry date for the purpose of reissuing options to the same participant with a lower exercise price shall be treated as an amendment to reduce the exercise price of an option); 

 

	 	•	 	 extends the term of an option beyond the expiry date or allow for the expiry date to be greater than 10 years (except where an expiry date would have
fallen within a blackout period of the Company); 

  

	 	•	 	 permits options to be assigned or exercised by persons other than the optionholder except for normal estate planning or estate settlement purposes;

  

	 	•	 	 permits equity compensation, other than Tekmira options, to be made under the Share Option Plan; or 

 

	 	•	 	 changes to the Non-Employee Director Cap from a maximum of 2% of the Outstanding Issue at that time. 

Except for the above noted matters, the Board retains the power to approve all other changes to the Share Option Plan without shareholder
approval. Such amendments may include the following: 
  

	 	•	 	 amendments to the terms and conditions of this Plan necessary to ensure that the Share Option Plan complies with the applicable regulatory
requirements, including without limitation the rules of the Toronto Stock Exchange or any national securities exchange or system on which the common shares of Tekmira are then listed or reported, or by any regulatory body having jurisdiction with
respect thereto; 

  

	 	•	 	 making adjustments to outstanding options in the event of certain corporate transactions; 

 

 - 23 - 

	 	•	 	 the addition of a cashless exercise feature, payable in cash or securities, whether or not such feature provides for a full deduction of the number of
underlying securities from the number of common shares of Tekmira reserved for issuance under the Share Option Plan; 

  

	 	•	 	 a change to the termination provisions of a security or the Share Option Plan which does not entail an extension beyond the original expiry date;

  

	 	•	 	 amendments to the provisions of the Share Option Plan respecting administration of the Share Option Plan and eligibility for participation under the
Share Option Plan; 

  

	 	•	 	 amendments to the provisions of the Share Option Plan respecting the terms and conditions on which options may be granted pursuant to the Share Option
Plan, including the provisions relating to the exercise price, option period, and vesting schedule; and 

  

	 	•	 	 amendments to the Share Option Plan that are of a “housekeeping nature”. 

Additional Shares Subject to Issue 

On May 30, 2008, as a condition of the acquisition of Protiva, the Company reserved 1,752,294 common shares (which represents
approximately 3.4% of the Company’s issued and outstanding common shares) for the exercise of up to 519,073 Protiva share options (“Protiva Options”). These shares are reserved for the issue to those shareholders who did not exercise
their Protiva share options and exchange the shares of Protiva issuable on exercise for common shares of Tekmira on the closing of the business combination with Protiva. The shares reserved for them are equal to the same number of Tekmira common
shares they would have received if they had exercised their options and transferred the shares to Tekmira. The Protiva Options are not part of Tekmira’s Share Option Plan and the Company is not permitted to grant any further Protiva stock
options. The Protiva Options all have a $0.30 exercise price and expire on dates ranging from November 19, 2010 to March 1, 2018. As at April 26, 2010 no Protiva options had been exercised. 

GENERAL INFORMATION 

Interest of Certain Persons or Companies in Matters to be Acted Upon 

No director or executive officer of the Company, nor any person who has held such a position since the beginning of the last completed
financial year of the Company, nor any proposed nominee for election as a director of the Company, nor any associate or affiliate of any of the foregoing persons, has any material interest, direct or indirect, by way of beneficial ownership of
securities or otherwise, in any matter to be acted on at the Meeting other than the election of directors and as otherwise set out herein. 

Indebtedness of Directors and Executive Officers 

No director, nominee for election as a director, executive officer, employee or former director, executive officer or employee of the
Company or any of its subsidiaries, or any of their associates or other member of management of the Company, was indebted to the Company at any time since the beginning of the most recently completed financial year. 

Interest of Informed Persons in Material Transactions 

To the knowledge of management of the Company, no informed person (as defined in National Instrument 51-102) or nominee for election as a
director of the Company or any associate or affiliate of any such informed person or nominee had any material interest, direct or indirect, in any transaction or proposed transaction which has materially affected or would materially affect the
Company or any of its subsidiaries since the beginning of the most recently completed financial year, other than as set out herein. 
  

 - 24 - 

 Management Contracts 

There are no management functions of the Company which are to any substantial degree performed by an individual or company other than the
directors or executive officers of the Company or a subsidiary. 
 ADDITIONAL INFORMATION 

Information contained herein is given as of April 26, 2010, except as otherwise noted. If any matters which are not now known should
properly come before the Meeting, the accompanying form of proxy will be voted on such matters in accordance with the best judgment of the person voting it. 

Additional information relating to Tekmira, including Tekmira’s most current Annual Information Form (together with documents incorporated therein
by reference), the comparative consolidated financial statements of Tekmira for the financial year ended December 31, 2009, together with the report of the auditors thereon and management’s discussion and analysis of Tekmira’s
financial condition and results of operations for fiscal 2009 which provide financial information concerning Tekmira can be found on the Canadian Securities Administrators’ System for Electronic Document Analysis and Retrieval (SEDAR) at
www.sedar.com. Copies of similar documents for Tekmira’s predecessor corporation, Inex Pharmaceuticals Corporation (renamed Primary Corp.), can also be found at www.sedar.com. Copies of those documents, as well as any additional copies of this
Information Circular, are available upon written request to the Corporate Secretary, upon payment of a reasonable charge where applicable. 

APPROVAL OF INFORMATION CIRCULAR 

The contents and mailing to Shareholders of this Information Circular have been approved by the Board. 

(signed) Dr. Daniel Kisner 

Chairman of the Board 

Vancouver, British Columbia 

May 12, 2010 
  

 - 25 -Registrant's Annual Information Form

 Exhibit 4.5 

TEKMIRA PHARMACEUTICALS CORPORATION 

ANNUAL INFORMATION FORM 

March 31, 2010 

 TABLE OF CONTENTS 

 

			
	 	  	Page
	 THE COMPANY
	  	3
	 Business Strategy
	  	3
	 Technology, product development and licensing agreements
	  	4
	 RNA Interference Therapeutics
	  	4
	 Tekmira’s SNALP Technology
	  	6
	 Internal Product Development
	  	7
	 Partnerships and Collaborations
	  	8
	 Manufacturing
	  	11
	 Competition
	  	11
	 Facilities
	  	12
	 Intellectual Property
	  	12
	 Other Corporate Developments
	  	13
	 Purchase and settlement of the exchangeable and development notes (the “Notes”)
	  	13
	 Transfer of Business to Tekmira on April 30, 2007
	  	13
	 Environmental Protection
	  	14
	 Human Resources
	  	14
	 Risk factors
	  	14
		
	 SHARE CAPITAL
	  	22
	 Common Shares
	  	22
	 Share Options
	  	22
		
	 MARKET FOR SECURITIES
	  	23
		
	 DIVIDEND RECORD AND POLICY
	  	23
		
	 DIRECTORS AND OFFICERS
	  	24
	 Directors
	  	24
	 Board of Directors
	  	25
	 Audit Committee
	  	26
	 External Auditor Service Fees
	  	27
	 Executive Officers
	  	28
	 Biographies of Directors and Executive Officers
	  	28
	 Shareholdings of Directors and Executive Officers
	  	31
		
	 TRANSFER AGENT AND REGISTRAR
	  	31
		
	 MATERIAL CONTRACTS
	  	31
		
	 INTERESTS OF EXPERTS
	  	32
		
	 ADDITIONAL INFORMATION
	  	32
		
	 AUDIT COMMITTEE CHARTER
	  	33

  

 - 2 - 

 This Annual Information Form contains forward-looking statements that are not based on historical fact,
including without limitation statements containing the words “believes”, “may”, “plans”, “will”, “estimate”, “continue”, “anticipates”, “intends”, “expects”,
and similar expressions. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, events or developments to be materially different from any future results, events or
developments expressed or implied by such forward-looking statements. Such factors include, among others, those discussed in “Risk Factors”. These factors should be considered carefully and readers are cautioned not to place undue reliance
on such forward-looking statements. Tekmira Pharmaceuticals Corporation disclaims any obligation to update any such factors or to publicly announce the result of any revisions to any of the forward-looking statements contained herein to reflect
future results, events or developments. In addition to the disclosure contained in this Annual Information Form, readers are encouraged to review the “Management’s Discussion and Analysis of Financial Condition and Operations” section
of Tekmira’s 2009 Annual Report for an additional discussion of factors that could affect Tekmira’s future performance. 

THE COMPANY 
 Tekmira
Pharmaceuticals Corporation is a biopharmaceutical business focused on advancing novel RNA interference therapeutics and providing its leading lipid nanoparticle delivery technology to pharmaceutical partners. Unless the context otherwise requires,
all references to “we”, “our”, “us”, “the Company” or “Tekmira” refers to Tekmira Pharmaceuticals Corporation and its subsidiaries. 

The Company was incorporated pursuant to the British Columbia Business Corporations Act on October 6, 2005. The Company did not carry on any active
business until April 30, 2007 when the Company and its parent company at that time, Inex Pharmaceuticals Corporation (“Inex”), were reorganized under a Plan of Arrangement. The Company now continues the business which was previously
carried on by Inex. The Arrangement is discussed further in “Corporate Developments”. 
 On May 30, 2008, the Company combined
its business with Protiva Biotherapeutics Inc. (“Protiva”). Protiva was incorporated pursuant to the Canada Business Corporations Act on September 14, 2000. The business combination with Protiva is described further in our 2009 Annual
Report filed on SEDAR at www.sedar.com. 
 Our head office and principal place of business is located at 100 — 8900 Glenlyon Parkway,
Burnaby, British Columbia, Canada, V5J 5J8 (telephone: (604) 419-3200). Our registered and records office is located at 1500 - 1055 West Georgia Street, P.O. Box 11117, Vancouver, British Columbia, V6E 4N7. 

Unless otherwise indicated, all currency amounts are stated in Canadian dollars. As at February 28, 2010, the closing rate of exchange of the Bank
of Canada was 1.0525 Canadian dollars for each U.S. dollar. 
 Business Strategy 

Our business strategy is to advance our own internal RNAi therapeutic product candidates, including our lead products ApoB SNALP and PLK1 SNALP. We also
support our pharmaceutical partners as they advance RNAi products using our SNALP delivery technology. 
  

 - 3 - 

 Technology, product development and licensing agreements 

Our therapeutic product pipeline consists of products being developed internally with our research and development resources. We also support the
development of our partners’ products. Our focus is on advancing products that utilize our proprietary lipid nanoparticle technology, referred to as SNALP (stable nucleic acid-lipid particle), for the delivery of siRNA. These products are
intended to treat diseases through a process known as RNA interference which prevents the production of proteins that are associated with various diseases. 

Our lead internal product candidates are 
  

	 	•	 	 apolipoprotein B (“ApoB”) SNALP, for the treatment of high cholesterol; and 

 

	 	•	 	 polo-like kinase 1 (“PLK1”) SNALP for the treatment of cancer. 

In the field of RNAi therapeutics, we have licensed our lipid nanoparticle delivery technology to Alnylam Pharmaceuticals Inc. (“Alnylam”) and
Merck & Co., Inc. (“Merck”). Alnylam has granted non-exclusive access to some of our intellectual property to certain of its partners, including F. Hoffmann-La Roche Ltd and Hoffmann-La Roche Inc. (together “Roche”),
Regulus Therapeutics, Inc. (“Regulus”) (a joint venture between Alnylam and Isis Pharmaceuticals, Inc.) and Takeda Pharmaceutical Company Limited (“Takeda”). In addition, we have ongoing research relationships with Bristol-Myers
Squibb Company (“Bristol-Myers Squibb”), Pfizer, the US Army Medical Research Institute for Infectious Diseases (“USAMRIID”) and the United States National Cancer Institute. Outside the RNAi field, we have legacy licensing
agreements with Hana Biosciences, Inc. and Aradigm Corporation. 
 RNA Interference Therapeutics 

The phenomenon of RNA interference (“RNAi”) is considered to be one of the most important discoveries in the field of biology. This is reflected
by the awarding of the 2006 Nobel Prize in Medicine to the scientists who discovered the mechanism. RNAi is a naturally occurring process that takes place inside cells, whereby small interfering RNA (“siRNA”) molecules can profoundly
suppress the production of specific proteins. Scientists first noted this powerful effect while attempting to improve the purple color of petunias by enhancing the activity of genes responsible for purple pigment. Surprisingly, plants with an extra
copy of the “purple” gene turned out white because the extra RNA somehow prevented the protein from being made. Intense research activity has now uncovered a complex molecular mechanism responsible for RNAi that is revolutionizing the way
drug targets are discovered and validated. Furthermore, synthetic siRNA molecules are being developed as drug candidates to specifically suppress the production of disease related proteins through RNAi. 

In the cell DNA (genes) carries the information to make a specific protein. Genes are first copied or transcribed into messenger RNA (mRNA), which, in
turn, gets translated into protein. The molecular origin of nearly all diseases results from either the absence of or over-production of a specific protein. If too much of a particular protein is the cause of disease then the therapeutic approach is
to try to reduce its activity or amount. For example, a tumor can be caused by the over-production of a protein that stimulates cell growth. 

Sequencing of the human genome has provided the information needed to design siRNA molecules directed against a wide range of disease-causing proteins.
Based on the mRNA sequence for the target protein, siRNA molecules can be designed relatively quickly compared to the time needed to synthesize and screen conventional drugs. siRNA-based therapeutics are short segments of synthetic double stranded
RNA made up of a sense and an antisense strand. The sequence of the siRNA is designed such that the antisense strand will bind specifically to a complementary sequence on the mRNA coding for the target

  

 - 4 - 

 
protein. When siRNA are introduced into the cell cytoplasm they are rapidly incorporated into an RNA-induced silencing complex (RISC). During this process the sense strand is unwound and
discarded but the antisense strand remains with RISC and guides the RISC complex to interact specifically with mRNA coding for the target protein, which is then cut and destroyed, preventing the subsequent production of the target protein (see
Figure 1). Importantly, this process is catalytic and RISC associated siRNA can remain stable inside the cell for weeks, destroying many more copies of the target mRNA and maintaining target protein suppression for long periods of time. 

Figure 1: Process of RNA Interference within Cells 

 

 

 RNAi has the potential to generate a broad new class of drugs that take advantage of the body’s own natural process to
silence genes – or more specifically to eliminate specific gene-products, or proteins, from the cell. There are no RNAi therapeutic products currently approved for commercial use; however, there are a number of RNAi therapeutic products in
development and several in human clinical trials. RNAi therapeutics have wide potential applicability as they can silence, or eliminate the production of disease causing proteins from cells, thereby creating opportunities for therapeutic
intervention that have not been achievable with conventional drugs. Development of RNAi therapeutics is currently limited by the instability of the siRNA molecules in the bloodstream and the inability of these drugs to access target cells or organs,
following intravenous (systemic) administration, and the inability to gain entry into the cell cytoplasm, where they carry out their action. Delivery technology is required to protect these drugs in the blood stream following administration, allow
efficient delivery to the target cells, and facilitate cellular uptake and release into the cytoplasm of the cell. Our lipid nanoparticle SNALP technology has been shown in preclinical studies to enable RNAi therapeutics to overcome these
limitations, allowing efficient and selective ‘silencing’ or reduction of a target protein. We believe that we are uniquely 

 

 - 5 - 

 
positioned in this very promising field to take advantage of the need for delivery technology that can efficiently encapsulate siRNA and deliver them to sites of disease. Tekmira and our partners
are advancing RNAi therapeutic products using our SNALP technology as the delivery vehicle to access target tissues and cells. 

Tekmira’s SNALP Technology 

Our SNALP delivery technology allows siRNA to be encapsulated in a lipid nanoparticle that can be administered systemically and travel through the blood
stream to target organs or sites of disease. The nanoparticles are designed to stay in the circulation for long periods of time to allow the particle to efficiently accumulate at sites of disease such as the liver or cancerous tumors. 

Once the nanoparticles have accumulated at the target or tissue site, the cells take up the particle by a process called endocytosis in which the
cell’s membrane surrounds the particle (Figure 2). This envelope or endosome pinches off from the cell’s membrane and migrates to the inside of the cell. The SNALP nanoparticles undergo an interaction with the endosomal membrane and in the
process the siRNA are released inside the cell’s cytoplasm. The released siRNA molecules disperse throughout the cell and engage the RISC complex in the cytoplasm, mediating RNAi. 

Figure 2: siRNA Delivery into the Cell 

 

 

  

 - 6 - 

 Internal Product Development 

Our lead RNAi product candidates are ApoB SNALP and PLK1 SNALP. Alnylam has granted us a worldwide license to their technology and intellectual property
for the discovery, development and commercialization of RNAi products directed to seven RNAi gene targets (three exclusive and four non-exclusive licenses). Two targets, ApoB and PLK1, have already been selected on a non-exclusive basis. 

ApoB SNALP 
 On July 2, 2009 we
announced that we had initiated a Phase 1 human clinical trial for ApoB SNALP. ApoB SNALP, our lead RNAi therapeutic product candidate, is being developed as a treatment for patients with high levels of low-density lipoprotein (“LDL”)
cholesterol, or “bad” cholesterol, who are not well served by current therapy. ApoB SNALP is designed to reduce the production of apolipoprotein B 100 (“ApoB”), a protein produced in the liver that plays a central role in
cholesterol metabolism. 
 Our therapeutic approach is to target ApoB, a protein synthesized in the liver that is essential to the assembly and
secretion of very low density lipoprotein (“VLDL”), a precursor to LDL, both of which are required for the transport and metabolism of cholesterol. ApoB SNALP consists of siRNA designed to silence ApoB, encapsulated in a SNALP formulation.
ApoB SNALP is delivered with high efficiency into the liver hepatocytes, the cells which produce ApoB, where the siRNA acts to silence the mRNA coding for ApoB protein resulting in a decrease in circulating VLDL and LDL. 

On January 7, 2010 we announced the completion of the ApoB SNALP Phase 1 clinical trial. We enrolled a total of 23 subjects in the trial. Of the 23
subjects enrolled, 17 subjects received a single dose of ApoB SNALP at one of seven different dosing levels and six subjects received a placebo. 

The primary endpoints of the ApoB SNALP Phase 1 clinical trial were measures of safety and tolerability. ApoB SNALP was well tolerated overall in this
study with no evidence of liver toxicity, which was the anticipated dose-limiting toxicity observed in preclinical studies. Of the two subjects treated at the highest dose level, one subject experienced an adverse event comprised of flu-like
symptoms, cytokine release and transient hypotension consistent with stimulation of the immune system caused by the ApoB siRNA payload. The other subject treated at the highest dose level experienced no side effects. Based on the potential for the
immune stimulation to interfere with further dose escalation, we decided to conclude the trial. 
 Building on extensive
preclinical work and the data obtained in our first ApoB SNALP clinical trial, we have now selected a second generation ApoB siRNA which we expect will enable us to resume clinical evaluation in the second half of 2010. The selection is based on
preclinical studies confirming the siRNA’s ability to inhibit the expression of ApoB without stimulating the human immune system. The new ApoB SNALP will also use a second generation SNALP formulation, the result of improvements in SNALP
formulation technology made since the first ApoB SNALP formulation was selected. We are targeting the second half of 2010 to initiate a Phase
 1/2 clinical trial with our next generation ApoB
SNALP. 
 PLK1 SNALP 

Our second internal RNAi product candidate, PLK1 SNALP, has been shown in preclinical animal studies to selectively kill cancer cells, while sparing
normal cells in healthy tissue. PLK1 SNALP is targeted against PLK1 (polo-like kinase 1), a protein involved in tumor cell proliferation and a validated oncology target. Inhibition of PLK1 prevents the tumor cell from completing cell division,
resulting in cell cycle arrest and death of the cancer cell. 
  

 - 7 - 

 Our preclinical studies have demonstrated that a single, systemic intravenous administration of PLK1 SNALP
blocked PLK1 expression in liver tumors causing extensive tumor cell death. After repeat dosing, this result translated into significant inhibition of tumor growth and prolonged survival without evidence of toxicities often associated with oncology
drugs. The PLK1 SNALP anti-tumor efficacy results were confirmed to be the result of silencing PLK1 via RNA interference. Furthermore certain SNALP formulations also provided potent anti-tumor efficacy in preclinical models of distal tumors outside
the liver. 
 We have initiated formal preclinical safety studies and expect to initiate a Phase 1 human clinical trial in the second half of
2010 evaluating PLK1 SNALP as a treatment for cancer. 
 Partnerships and Collaborations 

Alnylam collaboration and license 
 On
January 8, 2007, we entered into a licensing and collaboration agreement with Alnylam giving them an exclusive license to certain historical lipid nanoparticle intellectual property owned by Tekmira for the discovery, development, and
commercialization of RNAi therapeutics. 
 As a result of the business combination with Protiva on May 30, 2008 we acquired a Cross-License
Agreement (“Alnylam Cross-License”) between Protiva and Alnylam, dated August 14, 2007. The Cross-License grants Alnylam non-exclusive access to Protiva’s intellectual property and required Alnylam to fund a certain level of
collaborative research for two years. The research collaboration element of the Alnylam Cross-License expired on August 13, 2009. We are, however, continuing to make SNALP research batches for Alnylam under a manufacturing agreement which is
discussed below. 
 On August 21, 2007, under the Alnylam Cross-License, Alnylam made a payment of US$3.0 million that gives Alnylam the
right to “opt-in” to the Tekmira PLK1 SNALP project and contribute 50% of product development costs and share equally in any future product revenues. Alnylam has until the start of a PLK1 SNALP Phase 2 clinical trial to exercise their
opt-in right. If Alnylam chooses to opt into the PLK1 SNALP project the US$3.0 million already paid will be credited towards Alnylam’s 50% share of project costs to date. 

We are eligible to receive from Alnylam up to US$16.0 million in milestones for each RNAi therapeutic advanced by Alnylam or its partners that utilizes
our intellectual property, and royalties on product sales. 
 The agreements with Alnylam grant us intellectual property rights to develop our
own proprietary RNAi therapeutics. Alnylam has granted us a worldwide license for the discovery, development and commercialization of RNAi products directed to seven gene targets (three exclusive and four non-exclusive licenses). Licenses for two
targets, ApoB and PLK1, have already been granted on a non-exclusive basis. Under the RNAi licenses granted to us, we may select five additional gene targets to develop RNAi therapeutic products, provided that the targets are not part of an ongoing
or planned development program of Alnylam. In consideration for this license, we have agreed to pay royalties to Alnylam on product sales and have milestone obligations of up to US$8.5 million on each of the four non-exclusive licenses (with the
exception of PLK1 SNALP if Alnylam opts–in to the development program) and no milestone obligations on the three exclusive licenses. 
  

 - 8 - 

 On April 3, 2009 Alnylam announced that they had initiated a Phase 1 human clinical trial for a product
candidate that utilizes our SNALP technology. The Alnylam product candidate, ALN-VSP, is being developed as a treatment for liver cancer and cancers with liver involvement. ALN-VSP comprises siRNA molecules delivered systemically using our SNALP
technology. We are responsible for manufacturing the ALN-VSP drug product. The initiation of the ALN-VSP Phase 1 clinical trial triggered a milestone payment of $0.6 million (US$0.5 million) which we received in May 2009. Alnylam expects to release
preliminary data from the ALN-VSP Phase 1 clinical trial in mid-2010. 
 In August 2009 Alnylam announced ALN-TTR as their next RNAi product
candidate for human clinical trials. Alnylam will be advancing two ALN-TTR formulations, ALN-TTR01 and ALN-TTR02. Both formulations are RNAi therapeutics targeting transthyretin (“TTR”) for the treatment of TTR amyloidosis, a systemic
disease caused by mutations in the TTR gene. ALN-TTR01 and ALN-TTR02 utilize our SNALP technology and will be manufactured by us. Alnylam expects to initiate a clinical trial for ALN-TTR01 in the first half of 2010. 

Under a manufacturing agreement (the “Alnylam Manufacturing Agreement”) dated January 2, 2009, we continue to be the exclusive
manufacturer of any products required by Alnylam through to the end of Phase 2 clinical trials that utilize our technology. Alnylam will pay for the provision of staff and for external costs incurred. Under the Alnylam Manufacturing Agreement there
is a contractual minimum of $11.2 million payable by Alnylam for the three years from 2009 to 2011 for the provision of our staff. 
 Alnylam
has agreed that, without the approval of our Board of Directors it will not acquire more than 10% of our outstanding shares calculated on a fully diluted basis (the “Share Limit”) or solicit proxies to vote our shares, nor assist any third
party in doing so, at any time prior to January 8, 2012. Except in the case of permitted investors or a public offering of securities Alnylam will be released from these restrictions if a third party makes a bona fide proposal or intention to
acquire shares that exceed the Share Limit or solicit proxies to vote our shares and such proposal or intention is disclosed publicly (other than by Alnylam) or we engage in substantive discussions with such third party concerning the proposal or
intention. A “permitted investor” for purposes of these provisions is defined as any investor, other than a pharmaceutical or biotechnology company, who holds less than 20% of our issued and outstanding voting securities (calculated on a
fully diluted basis), so long as such investor does not seek to influence our management other than by voting the share the investor holds. 

Roche product development and research agreements 

On May 30, 2008, we signed an initial research agreement with Roche. This initial research agreement expired at the end of 2008 and was replaced by a
research agreement (the “Roche Research Agreement”) dated February 11, 2009. We have now completed all of the work under the Roche Research Agreement. On May 11, 2009 we announced a product development agreement with Roche (the
“Roche Product Development Agreement”) that provides for product development support by Tekmira up to the filing of an Investigation New Drug (“IND”) application by Roche. The product development activities under this agreement
expand the activities that were formerly covered by the Roche Research Agreement. Under the Roche Product Development Agreement, Roche will pay up to US$8.8 million for us to support the advancement of each Roche RNAi product candidate using our
SNALP technology through to the filing of an IND application. We are also eligible to receive up to US$16.0 million in milestones plus royalties on product sales for each product advanced through development and commercialization based on
Roche’s access to our intellectual property through Alnylam. 
 We will develop and manufacture the drug product for use in all preclinical
studies under the Roche Product Development Agreement and will collaborate with Roche to conduct the preclinical testing. The agreement also provides that we will manufacture one batch of clinical product for a Phase 1 human clinical trial.

  

 - 9 - 

 At February 28, 2010 there was one systemic RNAi product in development under the Roche Product
Development Agreement. Roche expects to file an IND application for this product in 2010. Under the agreement, Roche may select a second product for development. 

Merck license agreement 
 As a result of
the business combination with Protiva we acquired a non-exclusive royalty-bearing worldwide license agreement with Merck. Under the license, Merck will pay up to US$17.0 million in milestones for each product they develop covered by Protiva’s
intellectual property, except for the first product for which Merck will pay up to US$15.0 million in milestones, and will pay royalties on product sales. Merck has also granted a license to Tekmira to certain of its patents. The license agreement
with Merck was entered into as part of the settlement of litigation between Protiva and a Merck subsidiary. 
 Bristol-Myers Squibb research
agreement 
 We have an ongoing research collaboration agreement with Bristol-Myers Squibb to utilize SNALP technology for target validation.

 USAMRIID research agreement 

In 2005, Protiva and the USAMRIID signed a five-year research agreement to collaborate on the development of RNAi therapeutics against filovirus
infections, including Ebola, using SNALP. The grant under this collaboration was recently extended to March 31, 2011. 
 Takeda research
agreement 
 We have an ongoing research agreement with Takeda signed on December 26, 2008. 

Takeda has, through Alnylam, a non-exclusive sublicense to our intellectual property. Under our agreements with Alnylam we are eligible to receive up to
US$16.0 million in milestones plus royalties on each Takeda product that uses our technology. 
 Pfizer 

We have an ongoing research collaboration agreement with Pfizer whereby Pfizer is evaluating our SNALP technology to deliver certain siRNA molecules
provided by Pfizer. 
 Legacy Agreements 

Hana Biosciences, Inc. (“Hana”) license agreement 

Hana is developing targeted chemotherapy products under a legacy license agreement entered into in May 2006.
Marqibo® (Optisomal Vincristine), AlocrestTM (formerly INX-0125, Optisomal Vinorelbine) and BrakivaTM (formerly
INX-0076, Optisomal Topotecan), products originally developed by us, have been exclusively licensed to Hana. Hana has agreed to pay us milestones and royalties and is responsible for all future development and future expenses. On May 27, 2009,
the license agreement with Hana was amended to decrease the size of near-term milestone payments and increase the size of long-term milestone payments. If received, certain of these contingent payments from Hana will be transferred to certain
contingent creditors as covered further under “Other Corporate Developments”. 
  

 - 10 - 

 Marqibo is a proprietary sphingosomal formulation of the widely used, off-patent cancer chemotherapeutic
vincristine. The FDA has granted Hana orphan drug and fast track designations for the use of Marqibo in adult acute lymphoblastic leukemia (“ALL”). In August 2007, Hana initiated a Phase 2 Marqibo registration-enabling clinical trial in
relapsed ALL and in November 2007 initiated a Phase 2 clinical trial investigating Marqibo as a treatment for uveal melanoma. On December 7, 2009, Hana announced the results of its Phase 2 relapsed ALL clinical trial and will submit a New Drug
Application seeking accelerated approval for Marqibo in 2010. Hana has announced that it is planning to commence Phase 3 randomized trials for Marqibo in elderly patients with ALL and patients with non-Hodgkin’s lymphoma. 

Alocrest is an extended delivery formulation of the commercially available anticancer drug vinorelbine. Vinorelbine is an approved chemotherapeutic drug
that is off-patent in the US. Hana initiated a Phase 1 clinical trial for Alocrest in August 2006 and released preliminary data in October 2007. Hana is currently seeking a partner to continue the advancement of Alocrest through clinical trials.

 Brakiva is a lipid encapsulated formulation of the approved anti-cancer drug topotecan. Hana initiated a Phase 1 clinical trial for Brakiva
in November 2008 in advanced solid tumors in patients with small cell lung and ovarian cancers. 
 Aradigm Corporation (“Aradigm”)
license agreement 
 On December 8, 2004, we entered into a licensing agreement with Aradigm under which Aradigm exclusively licensed
certain of our liposomal intellectual property. Under this agreement, we are entitled to milestone payments totaling US$4.75 million for each disease indication, to a maximum of two, pursued by Aradigm using our technology. In addition, we are
entitled to royalties on any product revenue. 
 Manufacturing 

We are developing scale-up and manufacturing technology, in-process controls, release testing and final product specifications for our products and our
partners products with the aim of ensuring quality, potency and suitable shelf-life, stability and ease of use. We have established in-house manufacturing capability for preclinical supplies and currently use our equipment in local third party clean
room facilities for manufacturing clinical supplies. We are nearing the completion of upgrades to our own in-house clean room facility and expect to be manufacturing clinical supplies in this clean room, for ourselves and our partners by mid-year.
Manufacturing in-house will give us more flexibility and more control over our manufacturing process. 
 We rely on various raw material
suppliers for the ingredients used in our product candidates. We expect to either outsource or partner out our late-stage clinical and commercial scale manufacturing to a suitable third party Good Manufacturing Practices (“GMP”) contract
manufacturer or a pharmaceutical or biotechnology company with the requisite capabilities. Certain of our key employees have considerable pharmaceutical manufacturing experience, including experience with the management of external contractors.

 Competition 
 We face
competition from a number of different companies utilizing similar therapeutic approaches or targeting similar diseases. 
  

 - 11 - 

 RNAi Therapeutics 

RNAi therapeutics to treat disease, including the utilization of systemic delivery technology, is at an early stage of development and therefore it is
difficult to predict what the future competitive landscape will look like. Companies working on RNAi therapeutics include major pharmaceutical companies such as Roche, Novartis International AG, Takeda and Merck, and biotechnology companies such as
Alnylam, Quark Pharmaceuticals, Inc., Silence Therapeutics plc, Calando Pharmaceuticals Inc., MDRNA, Inc., RXi Pharmaceuticals Corporation, and Opko Health, Inc. Our RNAi products are also in competition with traditional therapies and new
therapeutics in development for the different therapeutic indications being pursued. 
 We are aware of other companies developing drugs to
treat high cholesterol, some with compounds at a later stage of development than ApoB SNALP. There are several drugs currently approved for treatment of high cholesterol including the statins, such as Lipitor and Crestor, fibrates and bile acid
sequestrant drugs. Many new agents are in development for the treatment of high cholesterol including an antisense drug targeting ApoB (mipomersen, ISIS 301012) which is being developed by Isis Pharmaceuticals, Inc. and Genzyme Corporation.
Mipomersen has shown promising clinical activity in recently completed Phase 3 studies and drug approval will be sought in 2011. 
 A large
number of companies are developing new agents for use in cancer therapy including RNAi therapeutics, and there are other companies developing small molecule drugs designed to inhibit the PLK target. These agents may be competitive with PLK1 SNALP or
other products arising from our ongoing research and development. 
 Small Molecule Chemotherapy Drugs 

We expect the targeted chemotherapy products we have licensed to Hana will face competition both from currently used chemotherapeutics and from new
therapeutics based on the use of novel compounds. As such, we expect that Hana may experience competition from established and emerging pharmaceutical and biotechnology companies that have other forms of treatment for the diseases targeted by
Marqibo, Alocrest and Brakiva as well as from other drug delivery companies and companies operating in the same therapeutic fields. However, as an oncology regimen often uses a number of drugs in combination, the markets for Marqibo, Alocrest and
Brakiva may not necessarily exclude the use of other treatments. 
 Facilities 

Our head office and primary research facility is located in Burnaby, British Columbia. The lease for this approximately 51,000 square foot facility runs
out in July 2014, but can be further extended to 2017 and then to 2022 and then to 2027. We are currently building a clean room within our facility that will allow us to manufacture supplies for clinical trials – see Manufacturing section for
more information. 
 Intellectual Property 

Our delivery technology, including SNALP, is protected by a global intellectual property portfolio, including both issued patents and pending patent
applications. This portfolio includes broad composition of matter, method of manufacture, and method of use claims. We also rely on trade secrets and contracts including nondisclosure provisions to protect know-how and non-patented proprietary
information. 
 Patent applications are generally filed, at a minimum, in the United States, Canada, Europe, and Japan. In addition, further
filings are pursued in additional countries, as considered appropriate for particular cases. 
  

 - 12 - 

 
Pending applications covering ApoB SNALP and PLK1 SNALP product candidates, if issued as patents, would have expiry dates of 2026 to 2027. In the United States, patents issued or filed before
June 8, 1995 have an expiry date of 17 years from issue date or 20 years from the earliest filing date, whichever is greater. Patents filed on or after June 8, 1995 have an expiry date 20 years from the earliest filing date. In the United
States, patent term extensions may also be possible to recapture part of the time required for regulatory review of marketing applications by the FDA. In other countries patent expiry and/or patent term extensions will be determined based on the
prevailing law. In most countries patent expiry is 20 years from the earliest filing date. 
 Patent applications that we’ve filed with the
United States Patent and Trademark Office have not, to date, been the subject of interferences. We have filed many patent applications with the European Patent Office that have been granted. In Europe, upon grant, a period of nine months is allowed
for notification of opposition to such granted patents. If our patents are subjected to interference or opposition proceedings we would incur significant costs to defend them. Further, our failure to prevail in any such proceedings could limit the
patent protection available to our RNAi platform, including ApoB SNALP and PLK1 SNALP. 
 Other Corporate Developments 

Purchase and settlement of the exchangeable and development notes (the “Notes”) 

On June 20, 2006, we signed a purchase and settlement agreement (the “Purchase and Settlement Agreement”) with the holders of certain
exchangeable and development notes (the “Former Noteholders”). The Purchase and Settlement Agreement retired the exchangeable and development notes in exchange for US$2.5 million in cash, 1,118,568 Hana shares received upon licensing our
chemotherapy products to Hana and certain contingent consideration. Subsequent to the Purchase and Settlement Agreement, amounts owing to the Former Noteholders became contingent obligations. 

Further repayment under the Purchase and Settlement Agreement is contingent upon us receiving future milestone or royalty payments from Hana. If we do
not receive any future proceeds from Hana then we will not owe the Former Noteholders any additional consideration or payments. The Former Noteholders have no recourse to any of our other assets. 

On May 27, 2009, our license agreement with Hana was amended to decrease the size of near-term milestone payments and increase the size of long-term
milestone payments. This amendment did not affect the contingent obligation under the Purchase and Settlement Agreement which as at February 28, 2010 was US$22.8 million. 

Transfer of Business to Tekmira on April 30, 2007 

Tekmira did not carry on any active business until April 30, 2007 when the Tekmira and Inex Pharmaceuticals Corporation (“Inex”), its
parent company at that time, were reorganized under a Plan of Arrangement. Under the Plan of Arrangement, 
  

	•	 	 all of Inex’s biopharmaceutical business, assets and liabilities and contractual arrangements, including all cash and cash equivalents, all
intellectual property, products, technology and partnership arrangements, and all of Inex’s employees, were transferred to Tekmira, and 

  

	•	 	 all outstanding shares of Tekmira were distributed to Inex shareholders. 

On April 30, 2007, concurrent with and as part of the Plan of Arrangement, Inex issued convertible debentures to a group of investors (the
“Investors”) for $5.3 million in cash. As required by the terms of a Purchase and Settlement Agreement the $5.2 million was paid to the Former Noteholders. The remaining balance of the cash raised from the convertible debenture of $0.1
million was retained by Inex as working capital and was not contributed to Tekmira. 
  

 - 13 - 

 Effective May 1, 2007, the common shares of Tekmira began trading on the Toronto Stock Exchange under
the symbol “TKM”. 
 As a non-recurring related party transaction between Tekmira and Inex, companies under common control, the assets
and liabilities of Inex were transferred at their carrying values using the continuity-of-interests method of accounting. For reporting purposes, Tekmira is considered to have continued Inex’s pharmaceutical business. 

Environmental Protection 
 We seek to
comply with all applicable statutory and administrative requirements concerning environmental protection. It is not anticipated that expenditures for environmental protection will have a material adverse effect on our capital expenditures, earnings
or competitive position. 
 Human Resources 

As of February 28, 2010, Tekmira employed or retained 85 persons, of which 34 hold advanced degrees in science or business, including 14 who hold
Ph.D. degrees. Of the combined total work force, 74 employees are expected to be engaged in or directly support research and development activities, and 11 are expected to be engaged in corporate support activities including business development,
finance and administrative activities. See “Directors and Management” for further information on human resources. 
 Risk factors

 In addition to the other information contained in this Annual Information Form, the following factors should be considered in evaluating
our business and prospects. 
 We will require substantial additional capital to fund our operations. If additional capital is not
available, we may need to delay, limit or eliminate our research, development and commercialization processes and may need to undertake a restructuring. 

Within the next several years, substantial additional funds will be required to continue with the active development of our pipeline products and
technologies. In particular, our funding needs may vary depending on a number of factors including: 
  

	 	•	 	 revenues earned from our collaborative partnerships, including Alnylam and Roche 

 

	 	•	 	 our decision to in-license or acquire additional technology or intellectual property for the development of our RNAi therapeutic products

  

	 	•	 	 the pace at which we are able to or decide to continue to expand our staffing, research and development and operations in general

  

	 	•	 	 the extent to which we continue development or can extract significant value from our technologies 

 

	 	•	 	 our ability to attract and retain corporate partners, and their effectiveness in carrying out the development and ultimate commercialization of our
product candidates 

  

	 	•	 	 the decisions, and the timing of decisions, made by health regulatory agencies regarding our technology and products 

 

 - 14 - 

	 	•	 	 competing technological and market developments 

  

	 	•	 	 prosecuting and enforcing our patent claims and other intellectual property rights 

We will seek to obtain funding to maintain and advance our business from a variety of sources including public or private equity or debt financing,
collaborative arrangements with pharmaceutical companies and government grants. There can be no assurance that funding will be available at all or on acceptable terms to permit further development of our products especially in light of the current
economic downturn. In addition, we have not established bank financing arrangements and there can be no assurance that we will be able to establish such arrangements or that bank financing can be arranged on satisfactory terms. 

If adequate funding is not available, we may be required to delay, reduce or eliminate one or more of our research or development programs. We may need
to obtain funds through arrangements with collaborators or others that may require us to relinquish most or all of our rights to product candidates at an earlier stage of development or on less favorable terms than we would otherwise seek if we were
better funded. Insufficient financing may also mean failing to prosecute our patents or relinquishing rights to some of our technologies that we would otherwise develop or commercialize. 

We are in the early stages of our development as an organization and because we have a short development history with RNAi, there is a limited
amount of information about us upon which you can evaluate our RNAi business and prospects. 
 We have not begun to market or
generate revenues from the commercialization of any products. In 2006, our targeted chemotherapy products, which were our furthest developed products were licensed to Hana for continued development. We have only a limited history upon which one can
evaluate our RNAi business and prospects as our RNAi therapeutics are still at an early stage of development and thus we have limited experience and have not yet demonstrated an ability to successfully overcome many of the risks and uncertainties
frequently encountered by companies in new and rapidly evolving fields, particularly in the biopharmaceutical area. For example, to execute our business plan, we will need to successfully execute product development activities using an unproven
technology, build and maintain a strong intellectual property portfolio, gain acceptance for the development and commercialization of our products, develop and maintain successful strategic relationships, and manage our spending as costs and
expenses increase due to clinical trials, regulatory approvals and commercialization. If we are unsuccessful in accomplishing these objectives, we may not be able to develop product candidates, raise capital, expand our business or continue our
operations. 
 The approach we are taking to discover and develop novel drugs is unproven and may never lead to marketable
products. 
 We intend to concentrate considerable research and development efforts in the future on RNAi technology, and our future
success depends in part on the successful development of RNAi technology and products based on RNAi technology. Neither we nor any other company has received regulatory approval to market therapeutics utilizing siRNA. The scientific discoveries that
form the basis for our efforts to discover and develop new drugs are relatively new. Very few drug candidates based on these discoveries have ever been tested in humans. 

If our stock price fluctuates, purchasers of our Common shares could incur substantial losses. 

The market price of our Common shares may fluctuate significantly in response to factors that are beyond our control. The stock market in general has
recently experienced extreme price and volume fluctuations. 
  

 - 15 - 

 The market price of securities of pharmaceutical and biotechnology companies have been extremely volatile,
and have experienced fluctuations that often have been unrelated or disproportionate to the operating performance of these companies. These broad market fluctuations could result in extreme fluctuations in the price of our Common shares, which could
cause purchasers of our Common shares to incur substantial losses. 
 Our collaborations with Alnylam and Roche are important to our
future business. If these collaborations are unsuccessful, our business could be adversely affected. 
 We expect that a certain amount
of the funding for our operations will come from our Alnylam and Roche collaborations. If these collaborations are unsuccessful, or if they are terminated prematurely, our business could be adversely affected. 

Other companies are working on delivery technologies that may be used in RNAi therapeutics. If Alnylam or Roche choose to utilize technologies developed
by other companies rather than our technology, it may lessen the value of our collaborations. 
 Our agreement with Alnylam also allows us to
continue to develop products on our own with respect to up to seven gene targets, three of which are on an exclusive basis. The three exclusive gene targets are only available to us if they have not been previously selected by Alnylam or one of its
other partners. This will limit the targets available for selection by us, and we may never be able to select gene targets or may be required to make our selection from gene targets that have minimal commercial potential. 

We expect to depend on collaborators in the future for a significant portion of our revenues and to develop, conduct clinical trials with, obtain
regulatory approvals for, and manufacture, market and sell some of our product candidates. These collaborations may not be successful. 

Our strategy is to enter into various arrangements with corporate and academic collaborators, licensors, licensees and others for the research,
development, clinical testing, manufacturing, marketing and commercialization of our products. There can be no assurance, however, that we will be able to continue to establish such collaborations, or that these collaborative arrangements will be
successful. 
 Should any collaborative partner fail to develop or ultimately successfully commercialize any product to which it has obtained
rights, or any of the partner’s products to which we have rights, our business may be adversely affected. In addition, once initiated, there can be no assurance that any of these collaborations will be continued or result in successfully
commercialized products. Failure of a collaborative partner to continue funding any particular program could delay or halt the development or commercialization of any products arising out of such program. In addition, there can be no assurance that
the collaborative partners will not pursue alternative technologies or develop alternative products either on their own or in collaboration with others, including our competitors, as a means for developing treatments for the diseases targeted by our
programs. 
 We currently hold licenses for certain technologies. There can be no assurance that these licenses will not be terminated. In some
cases we are dependent on the licensee to maintain in good standing the patents to the licensed underlying technologies. We may also acquire additional licenses (or options to obtain licenses) to technologies developed by other companies and
academic institutions. Future license agreements may require us to make substantial milestone payments. We are also obligated to make royalty payments on the sales, if any, of products resulting from licensed technology. For some of our licensed
technology, we are responsible for the costs of filing and prosecuting patent applications. The termination of a license may adversely affect our ability to develop or sell our products. 

 

 - 16 - 

 Technological competition from pharmaceutical companies, biotechnology companies and universities is
intense and is expected to increase. While we will seek to expand our technological capabilities to remain competitive, research and development by others may render our technology or products obsolete or non-competitive or result in treatments or
cures preferred to any therapy we might develop. 
 Many of our competitors and potential competitors have substantially greater product
development capabilities and financial, scientific, marketing and human resources. Other companies may succeed in: 
  

	 	•	 	 developing products and obtaining regulatory approvals for such products more rapidly; or 

 

	 	•	 	 developing products that are more effective than being developed by us. 

The biotechnology and pharmaceutical industries are subject to rapid and substantial technological change. Developments by others may render our
products or technologies non-competitive. We may not be able to keep pace with technological developments. 
 Competitors have developed
technologies that could be the basis for competitive products. Some of these products have an entirely different approach or means of accomplishing the desired therapeutic effect compared to products we are developing. These competing products may
be more effective and less costly. In addition, other forms of medical treatment may compete with our products. 
 We are dependent on
certain members of our management and scientific staff. The loss of services of one or more of these staff members could adversely affect us. 

Our ability to manage growth effectively will require us to continue to implement appropriate management systems and to recruit and train new employees.
The competition for qualified personnel in the biotechnology field is intense. We rely heavily on our ability to attract and retain qualified managerial, scientific and technical personnel. In the future, we may not be able to successfully attract
and retain skilled and experienced personnel. 
 We may have difficulty managing our growth and expanding our operations successfully as
we seek to evolve from a company primarily involved in discovery and pre-clinical testing into one that develops and commercializes drugs. 

If drug candidates we develop enter and advance through clinical trials, we will need to expand our development, regulatory, manufacturing, clinical and
medical capabilities or contract with other organizations to provide these capabilities for us. As our operations expand, we expect that we will need to manage additional relationships with various collaborators, suppliers and other organizations.
Our ability to manage our operations and growth will require us to continue to improve our operational, financial and management controls, reporting systems and procedures. We may not be able to implement improvements to our management information
and control systems in an efficient or timely manner and may discover deficiencies in existing systems and controls. 
 Our ability to
successfully commercialize human therapeutic products may depend in part on reimbursement for the cost of such products and related treatments from government health administration authorities, private health coverage insurers and other
organizations. 
 Third-party payers are increasingly challenging the price of medical products and services. Significant uncertainty
exists as to the reimbursement status of newly approved healthcare products and adequate third-party coverage may not be available to establish price levels sufficient for us to realize an appropriate return on our investment in product development.
When we partner our product candidates we will typically be relying on that partner to obtain cost reimbursement from third-parties for the product candidate. 
  

 - 17 - 

 Products we develop, if approved for marketing, may be too slow to achieve market acceptance or gain
market acceptance at all. 
 The product candidates that we are trying to develop will compete with a number of drugs and therapies
currently on the market, as well as products currently under development. The rate and degree of market acceptance of our products will depend on a number of factors, including, the establishment and demonstration in the medical community of the
clinical efficacy and safety of our products and their potential advantage over alternative treatments. There is no assurance that physicians, patients or the medical community in general will accept and utilize any products that we may be
developing. 
 Our research and development processes involve the controlled use of hazardous and radioactive materials. Although we
believe that we are in compliance in all material respects with current environmental laws and regulations, in the future we may need to incur significant costs to maintain our compliance. 

We are subject to federal, provincial and local laws and regulations governing the use, manufacture, storage, handling and disposal of such materials and
certain waste products. Although we believe that our safety procedures for handling and disposing of such materials comply with the standards prescribed by such laws and regulations, the risk of accidental contamination or injury from these
materials cannot be completely eliminated. In the event of such an accident, we could be held liable for any damages that result and any such liability could exceed our resources. We are not specifically insured with respect to this liability.

 If testing of a particular product does not yield successful results, then we will be unable to commercialize that product.

 We must demonstrate our products’ safety and efficacy in humans through extensive clinical testing. Our research and development
programs are at an early-stage of development. We may experience numerous unforeseen events during, or as a result of, the testing process that could delay or prevent commercialization of our products, including the following: 

 

	•	 	 the results of preclinical studies may be inconclusive, or they may not be indicative of results that will be obtained in human clinical trials;

  

	•	 	 safety and efficacy results attained in early human clinical trials may not be indicative of results that are obtained in later clinical trials;

  

	•	 	 after reviewing test results, our collaborators or ourselves may abandon projects that we might previously have believed to be promising;

  

	•	 	 ourselves, our collaborators or regulators, may suspend or terminate clinical trials if the participating subjects or patients are being exposed to
unacceptable health risks; and 

  

	•	 	 our potential products may not have the desired effects or may include undesirable side effects or other characteristics that preclude regulatory
approval or limit their commercial use if approved. 

 Clinical testing is very expensive, can take many years, and the
outcome is uncertain. The data collected from our clinical trials may not be sufficient to support approval by the regulatory authorities of our product candidates. The clinical trials of our products under development may not be completed on

  

 - 18 - 

 
schedule and the regulatory authorities may not ultimately approve any of our product candidates for commercial sale. If we fail to adequately demonstrate the safety and efficacy of a product
under development, this would delay or prevent regulatory approval of the product candidate, which could prevent us from achieving profitability. 

It may take us longer than we are currently projecting to complete our clinical trials, or we may not be able to complete them at
all. 
 Although for planning purposes we project the commencement, continuation and completion of our clinical trials, a number
of factors, including scheduling conflicts with participating clinicians and clinical institutions, and difficulties in identifying and enrolling patients who meet trial eligibility criteria, may cause significant delays. We may not commence or
complete clinical trials involving any of our products as projected or may not conduct them successfully. 
 We rely on academic institutions or
clinical research organizations to conduct, supervise or monitor some or all aspects of clinical trials involving our products. We will have less control over the timing and other aspects of these clinical trials than if we conducted them entirely
on our own. If we fail to commence or complete, or experience delays in, any of our planned clinical trials, our stock price and our ability to conduct business as currently planned could be harmed. 

The manufacture and sale of human therapeutic products is governed by a variety of statutes and regulations. There can be no assurance that our
current or future products will obtain regulatory approval. 
 To obtain marketing approval, U.S. and Canadian laws require: 

 

	 	•	 	 controlled research and product testing; 

  

	 	•	 	 establishment of the safety and efficacy of the product for each use sought; 

 

	 	•	 	 government review and approval of a submission containing manufacturing, preclinical and clinical data; 

 

	 	•	 	 adherence to Good Manufacturing Practice Regulations during production and storage; and 

 

	 	•	 	 control of marketing activities, including advertising and labelling. 

The products we currently have under development will require significant development, preclinical and clinical testing and investment of significant
funds before their commercialization. Some of our products will require the completion of post-market studies. There can be no assurance that such products will be developed. The process of completing clinical testing and obtaining required
approvals is likely to take a number of years and require the use of substantial resources. If we fail to obtain regulatory approvals, our operations will be adversely affected. Further, there can be no assurance that future products will be shown
to be safe and effective in clinical trials or receive applicable regulatory approvals. 
 Other markets have regulations and restrictions
similar to those in the U.S. and Canada. Investors should be aware of the risks, problems, delays, expenses and difficulties which we may encounter in view of the extensive regulatory environment which affects our business. 

 

 - 19 - 

 Even if we achieve regulatory approval, future regulatory reviews or inspections may result in the
suspension or withdrawal of one of our product candidates, closure of a facility or enforcement of substantial fines. 
 If regulatory
approval to sell any of our products is received, regulatory agencies may, nevertheless, limit the categories of patients who can use them. In addition, regulatory agencies subject a marketed product, its manufacture and the manufacturer’s
facilities to continual review and periodic inspection. If previously unknown problems with a product candidate or manufacturing and laboratory facility are discovered or we fail to comply with applicable regulatory approval requirements, a
regulatory agency may impose restrictions on that product or on us. The agency may require the withdrawal of the product from the market, closure of the facility or enforcement of substantial fines. 

Other companies or organizations may assert patent rights that prevent us from developing and commercializing our products. 

RNA interference is a relatively new scientific field that has generated many different patent applications from organizations and individuals seeking to
obtain important patents in the field. These applications claim many different methods, compositions and processes relating to the discovery, development and commercialization of RNAi therapeutics. Because the field is so new, very few of these
patent applications have been fully processed by government patent offices around the world, and there is a great deal of uncertainty about which patents will be issued, when, to whom, and with what claims. It is likely that there will be litigation
and other proceedings, such as interference and opposition proceedings in various patent offices, relating to patent rights in the RNAi field. Others may attempt to invalidate the intellectual property rights of our collaborator, Alnylam, upon whose
intellectual property we rely on as we advance and commercialize our siRNA products. Even if Alnylam’s rights are not directly challenged, disputes among third parties could lead to the weakening or invalidation of its intellectual property
rights. 
 In addition, there are many issued and pending patents that claim aspects of siRNA chemistry that we may need to apply to our product
candidates. There are also many issued patents that claim genes or portions of genes that may be relevant for siRNA drugs we wish to develop. Thus, it is possible that one or more organizations will hold patent rights to which we will need a
license. If those organizations refuse to grant us a license to such patent rights on reasonable terms, we will not be able to market products or perform research and development or other activities covered by these patents. 

Our patents and patent applications may be challenged and may be found to be invalid, which could adversely affect our business.

 Certain Canadian, United States and international patents and patent applications we own are uncertain and involve complex legal and
factual questions for which important legal principles are largely unresolved. For example, no consistent policy has emerged for the breadth of biotechnology patent claims that are granted by the U.S. Patent and Trademark Office or enforced by the
United States federal courts. In addition, the coverage claimed in a patent application can be significantly reduced before a patent is issued. Also, we face the following intellectual property risks: (i) some or all patent applications may not
result in the issuance of a patent; (ii) patents issued may not provide the holder with any competitive advantages; (iii) patents could be challenged by third parties; (iv) the patents of others could impede our ability to do
business; (v) competitors may find ways to design around our patented products; and (vi) competitors could independently develop products which duplicate our products. 

A number of industry competitors and institutions have developed technologies, filed patent applications or received patents on various technologies that
may be related to or affect our business. Some of these technologies, applications or patents may conflict with our technologies or patent applications. Such conflict could limit the scope of the patents, if any, that we may be able to obtain or
result in the denial of 
  

 - 20 - 

 
our patent applications. In addition, if patents that cover our activities are issued to other companies, there can be no assurance that we would be able to obtain licenses to these patents at a
reasonable cost or be able to develop or obtain alternative technology. If we do not obtain such licenses, we could encounter delays in the introduction of products, or could find that the development, manufacture or sale of products requiring such
licenses could be prohibited. In addition, we could incur substantial costs in defending suits brought against us on patents it might infringe or in filing suits against others to have such patents declared invalid. 

As publication of discoveries in the scientific or patent literature often lag behind actual discoveries, we cannot be certain we or any licensor were
the first creator of inventions covered by pending patent applications or that we or such licensor was the first to file patent applications for such inventions. If we were to participate in interference proceedings declared by the U.S. Patent and
Trademark Office to determine priority of invention, this could result in substantial costs, even if the eventual outcome were favourable. There can be no assurance that our patents, if issued, will be held valid or enforceable by a court or that a
competitor’s technology or product would be found to infringe such patents. Much of our know-how and technology may not be patentable, though it may constitute trade secrets. There can be no assurance, however, that we will be able to
meaningfully protect our trade secrets. 
 With the exception of the year ended December 31, 2006 we have incurred losses since
inception and we anticipate that we will not achieve sustained profits for the foreseeable future. To date, we have had no product revenues. 

With the exception of the year ended December 31, 2006, we have incurred losses since inception and have not received any revenues other than from
research and development collaborations, license fees and milestone payments. From inception to December 31, 2009, we have an accumulated net deficit of $221.9 million. As we continue our research and development and clinical trials and seek
regulatory approval for the sale of our product candidates we do not expect to attain sustained profitability for the foreseeable future. We do not expect to achieve sustained profits until such time as strategic alliance payments, product sales and
royalty payments, if any, generate sufficient revenues to fund our continuing operations. We cannot predict if we will ever achieve sustained profitability and, if we do, we may not be able to increase our profitability. 

Our business has a substantial risk of product liability claims. If we are unable to obtain appropriate levels of insurance, a product liability
claim against us could interfere with the development and commercialization of our product candidates or subject us to unanticipated damages or settlement amounts. 

Human therapeutic products involve an inherent risk of product liability claims and associated adverse publicity. We currently have clinical trial
liability coverage for US$10.0 million per claim with an annual aggregate of US$10.0 million. We do not currently have any other product liability insurance. We may not be able to obtain or maintain product liability insurance on acceptable terms or
with adequate coverage against potential liabilities. Such insurance is expensive, difficult to obtain and may not be available in the future on acceptable terms, or at all. An inability to obtain sufficient insurance coverage on reasonable terms or
to otherwise protect against potential product liability claims could prevent or inhibit the commercialization of our potential products. 

Certain directors and officers of Tekmira are, may become or may continue to be, involved with other life science companies through their direct
and indirect participation in corporations, partnerships or joint ventures which are potential competitors of Tekmira. 
 Situations may
arise in connection with potential acquisitions in investments where the other interests of these directors and officers may conflict with the interests of Tekmira. The directors of Tekmira are

  

 - 21 - 

 
required by law, however, to act honestly and in good faith with a view to the best interests of Tekmira and its shareholders and to disclose any personal interest which they may have in any
material transaction which is proposed to be entered into with Tekmira and to abstain from voting as a director for the approval of any such transaction. 

SHARE CAPITAL 
 Our
authorized share capital consists of an unlimited number of Common shares without par value, of which 51,643,605 were issued and outstanding as at February 28, 2010, and an unlimited number of Preferred shares without par value of which none
were issued and outstanding as at February 28, 2010. In addition, we have outstanding certain incentive options to purchase Common shares as noted below. 

Common Shares 
 The holders of our Common
shares are entitled to receive notice of any meeting of our shareholders and to attend and vote thereat, except those meetings at which only the holders of shares of another class or of a particular series are entitled to vote. Each Common share
entitles its holder to one vote. Subject to the rights of the holders of preferred shares, the holders of Common shares are entitled to receive on a pro-rata basis such dividends as our board of directors may declare out of funds legally available
therefor. In the event of the dissolution, liquidation, winding-up or other distribution of our assets, such holders are entitled to receive on a pro-rata basis all of our assets remaining after payment of all of our liabilities, subject to the
rights of holders of Preferred shares. Our Common shares carry no pre-emptive or conversion rights. 
 Preferred Shares 

The Preferred shares of Tekmira may be issued from time to time in one or more series, each series comprising the number of shares, designation, rights,
privileges, restrictions and conditions determined by the directors of Tekmira. The Tekmira Preferred shares are entitled to priority over the Common shares with respect to the payment of dividends and distributions in the event of the dissolution,
liquidation or a winding-up. The holders of Preferred shares are entitled to receive notice of any meeting of shareholders and to attend and vote thereat, except as otherwise provided in the rights and restrictions attached to the shares by the
directors of Tekmira. 
 As at February 28, 2010, Tekmira has no Preferred shares issued or outstanding. 

Share Options 
 Under Tekmira’s
stock option plan (the “Plan”) the Board of Directors may grant options to employees and directors. The exercise price of the options is determined by the Board of Directors but will be at least equal to the closing market price of the
Common shares on the day preceding the date of grant and the term may not exceed 10 years. Options granted are also subject to certain vesting provisions, but generally vest over three years for employees and immediately for directors. 

On May 12, 2009, the shareholders of the Company approved an increase to the number of shares reserved for issuance under the Company’s 1996
Stock Option Plan of 1,331,000, thereby increasing the maximum common shares available under the plan to 6,846,276 of which 1,261,837 common shares remain available for future allocation as at February 28, 2010. 

On May 30, 2008, as a condition of the acquisition of Protiva, the Company reserved 1,752,294 Common shares for issue on the exercise of Protiva
share options (“Protiva Options”). These shares are reserved for 
  

 - 22 - 

 
the issue to those shareholders who did not exercise their Protiva share options and exchange the shares of Protiva issuable on exercise for common shares of Tekmira on the closing of the
business combination with Protiva. The shares reserved for them are equal to the same number of Tekmira common shares they would have received if they had exercised their options and transferred the shares to Tekmira. The Protiva Options are not
part of Tekmira’s stock option Plan and the Company is not permitted to grant any further Protiva Options. 
 Though a majority of the
options may be allocated for issue to insiders, the Plan restricts the aggregate limit that may be issued to insiders to 10% and to one insider to 5%, of the issued and outstanding Common shares as at the time of grant. 

MARKET FOR SECURITIES 

Tekmira’s Common shares are listed and posted for trading on the TSX under the symbol “TKM”. The following table sets out the high and low
sale prices and the volume of trading of the shares on the TSX for the months indicated: 
  

									
	 Period
	  	High	  	Low	  	Volume
				
	 2010
	  			  			  	
	 February
	  	$	0.81	  	$	0.69	  	544,300
	 January
	  	$	0.96	  	$	0.71	  	1,543,700
	 2009
	  			  			  	
	 December
	  	$	1.00	  	$	0.80	  	651,300
	 November
	  	$	1.10	  	$	0.91	  	973,400
	 October
	  	$	1.18	  	$	0.90	  	524,300
	 September
	  	$	1.20	  	$	1.03	  	570,000
	 August
	  	$	1.19	  	$	0.95	  	688,400
	 July
	  	$	1.15	  	$	0.90	  	2,779,000
	 June
	  	$	1.26	  	$	1.05	  	1,150,000
	 May
	  	$	1.49	  	$	0.79	  	4,082,200
	 April
	  	$	1.00	  	$	0.64	  	1,291,900
	 March
	  	$	0.72	  	$	0.56	  	724,300
	 February
	  	$	0.73	  	$	0.58	  	1,518,700
	 January
	  	$	0.74	  	$	0.45	  	1,208,200

 DIVIDEND RECORD
AND POLICY 
 We have not paid dividends since our formation. We currently intend to retain all available funds, if any, for use in the
business and do not anticipate paying any dividends for the foreseeable future. 
  

 - 23 - 

 DIRECTORS AND OFFICERS 

Directors 
 The following table sets out
the name, position with the Company, municipality of residence, principal occupation for the past five years and period of time served as a director of each of our directors as at February 28, 2010. A biography of each director follows under
“Biographies of Directors and Executive Officers”. The term of office of each director will expire at the conclusion of our annual meeting. 
  

					
	 Nominee Name, Position

with the Company and

Residency (1)
	  	 Principal Occupation for the Past Five Years
	  	 Period as a Director of the
Company

			
	
MICHAEL J. 
ABRAMS(2),(4)

 Director

Washington, U.S.A
	  	Since November 2009, President and CEO of Inimex Pharmaceuticals; since 2008 Chairman of Indel Therapeutics Inc.; President, Chief Executive Officer and director of AnorMED Inc.
until May, 2006; director of Migenix Inc. until August 2008; Director for the Centre for Drug Research and Development; Adjunct Professor at the University of British Columbia	  	Since May 30, 2008
			
	 ARTHUR M. BRUSKIN, PH.D

Director
 New York, U.S.A.
	  	Since 2006 independent consultant; from 2009 to 2010 part-time Chief Scientific Officer at America Stem Cell, Inc.; from 2006 to 2008 Chief Operating Officer of Eutropics
Pharmaceuticals Inc.; from 2005 to 2006 Chief Scientific Officer of Interpath Pharmaceuticals Inc.	  	Since May 1, 2008
			
	 GARY E.
FRASHIER(3),(4)

 Director

Texas, U.S.A.
	  	Since 1998 President and Principal of Management Associates (biotechnology consulting); from 2007 to 2009 Executive Vice President, CFO and Director of Apex Bioventures Acquisition
Corp. (special purpose acquisition corporation)	  	Since April 30,
2007(5)
			
	 KEN
GALBRAITH(4)

 Director

British Columbia, Canada
	  	Since 2007 General Partner at Ventures West; in 2006 Chairman and Interim CEO of AnorMED Inc.; from 2001 to 2006 independent consultant.	  	Since January 28, 2010
			
	 JAMES W.
HUDSON(2)

 Director

British Columbia, Canada
	  	Since 2006 General Manager of Richmond Country Club; from 2003 to 2004, Chief Administrative Officer at the Vancouver Police Department	  	Since April 30,
2007(5)
			
	 DON
JEWELL(3)

 Director

British Columbia, Canada
	  	Managing Partner, RIO Industrial (financial management services)	  	Since May 30, 2008
			
	 FRANK
KARBE(2)

 Director

California, U.S.A.
	  	Since 2004 Chief Financial Officer of Exelixis, Inc.	  	Since January 28, 2010

  

 - 24 - 

					
	 Nominee Name, Position

with the Company and

Residency (1)
	  	 Principal Occupation for the Past Five Years
	  	 Period as a Director of the
Company

			
	 DANIEL KISNER

Director and Board Chair

California, U.S.A.
	  	Venture Partner at Aberdare Ventures since 2003.	  	Since January 28, 2010
			
	 R. IAN
LENNOX(3),(6)

 Director

Ontario, Canada
	  	Since 2006 Executive Chairman of Ricerca Biosciences, LLC and also Chief Executive Officer since 2008; since 2004 independent consultant and director of a number of biotechnology
companies.	  	Since May 30, 2008
			
	 MARK J. MURRAY

President, Chief Executive

Officer and Director
 Washington,
U.S.A.
	  	Since May, 2008, President, Chief Executive Officer and Director; since 2000, President and Chief Executive Officer of Protiva Biotherapeutics Inc.	  	Since May 30, 2008

  

	(1)	The information as to municipality of residence, principal occupation, business or employment of, and shares beneficially owned or, controlled by, a director is not
within the knowledge of management of the Company and has been furnished by the director. 

	(2)	Member of the Audit Committee. 

	(3)	Member of the Executive Compensation and Human Resources Committee. 

	(4)	Member of the Corporate Governance and Nominating Committee. 

	(5)	Before joining the board of Tekmira Mr. Frashier and Mr. Hudson served as directors of Tekmira’s predecessor company, Inex and ceased to be directors of
Inex on April 30, 2007. 

	(6)	Mr. Lennox entered into a settlement agreement with the Ontario Securities Commission (OSC) in March 2006 with regard to his purchase in the market of 25,000
shares of Labopharm Inc. while he was a director of Labopharm. The purchase was made outside a Labopharm imposed blackout period and Mr. Lennox properly filed all Insider Trading reports. Subsequent to the share purchase, Labopharm entered into
a Licensing Agreement. The possibility of entering into such agreement had been discussed with the Labopharm board before Mr. Lennox made his share purchases. Mr. Lennox initiated contact with the OSC on the matter and cooperated fully
with OSC staff. 

 Board of Directors 

The Board of Directors is responsible for supervising the management of the business and affairs of the Company. The Board establishes the overall
policies and standards for the Company and monitors and evaluates the Company’s strategic direction and retains plenary power for those functions not specifically delegated by it to management. The Board approves plans as well as major
transactions such as strategic alliances, acquisitions and financings. 
 The directors are kept informed of the Company’s operations at
meetings of the Board and its committees and through reports and analyses by management. At Board meetings the directors are given an opportunity to meet privately without the presence of Dr. Murray, a management director. The Board meets on a
quarterly, regularly scheduled basis and more frequently as required. During 2009, the Board met formally five times. In addition, informal communications between management and directors occur apart from regularly scheduled Board and committee
meetings. 
 Certain of the directors are employed by or affiliated with organizations which have entered into research agreements with Tekmira.
As disputes may arise between these organizations and Tekmira, or certain of 
  

 - 25 - 

 
these organizations may undertake or have undertaken research with competitors of Tekmira, there exists the possibility for such persons to be in a position of conflict. However, these persons
have a duty to deal fairly and in good faith with Tekmira and such other organizations in making any decision or recommendation involving Tekmira. In addition, as applicable, such directors, officers and advisory board members will refrain from
voting on any matter in which they have a conflict of interest. 
 Audit Committee 

The Audit Committee meets with the financial officers of the Company and the independent auditors to review and inquire into matters affecting financial
reporting matters, the system of internal accounting and financial controls and procedures, and the audit procedures and plans. The committee also makes recommendations to the Board regarding the appointment of independent auditors. In addition, the
committee reviews and recommends to the Board for approval the annual financial statements and the annual report and certain other documents including the interim financial statements required by the regulatory authorities. The committee is also
responsible for approving the policies under which the financial officers of the Company may invest the funds in excess of those required for current operations. In its May 11, 2009 meeting, the Audit Committee reviewed its charter and
determined that no changes were required. The charter is reviewed by the Board of Directors on a periodic basis. The charter, in its most recently approved form, is attached as an appendix to this Annual Information Form. 

The committee has also adopted a policy that requires its approval of non-audit services to be provided by the Company’s auditors. See
“Pre-Approval Policies and Procedures of Non-Audit Services”. 
 The committee is currently composed of Dr. Abrams,
Mr. Karbe and Mr. Hudson (the committee chairman), none of whom are current or former executive officers of the Company. All three members of the Audit Committee are independent and financially literate, based on either their training as a
professional accountant or experience as a chief executive officer or chief financial officer. See “Biographies of Directors and Executive Officers” for a description of the education and experience of each audit committee member that is
relevant to the performance of his responsibilities as an audit committee member. 
 Pre-Approval Policies and Procedures of Non-Audit
Services 
 The Company has complied with the Canadian Institute of Chartered Accountants’ Rules of Professional Conduct on auditor
independence (the Rules) by adopting pre-approval policies and procedures for non-audit services to be provided by the Company’s auditors, KPMG LLP (KPMG). As they relate to public companies these Rules are very similar to the revised
independence rules of the Securities and Exchange Commission (SEC) that became effective on May 6, 2003. They include prohibitions or restrictions on services that may be provided to audit clients and require that all services provided to a
listed entity audit client, including its subsidiaries, be pre-approved by the client’s audit committee. 
 The Rules identify the
following ten types of non-audit services that are deemed inconsistent with an auditors’ independence (“Prohibited Services”): bookkeeping or other services related to the audit client’s accounting records or financial
statements; financial information systems design and implementation; appraisal or valuation services for financial reporting purposes; actuarial services for items recorded in the financial statements; internal audit outsourcing services; management
functions; human resources; certain corporate finance and other services; legal services; certain expert services unrelated to the audit. 
 The
Rules provide further details as to the specific nature of services within these categories that are prohibited. The Company and its subsidiaries will not engage KPMG to carry out any Prohibited Service. For services that are not prohibited the
following pre-approval policies will apply: 
  

	 	•	 	 The Audit Committee will pre-approve all audit services provided by KPMG through their recommendation of KPMG as shareholders’ auditors at the
Company’s annual meeting and through the Audit Committee’s review of KPMG’s annual audit plan. 

  

 - 26 - 

	 	•	 	 Annually, the Audit Committee will review a list of audit, audit-related, tax and other non- audit services and recommend pre-approval of these
services for the upcoming year. Any additional requests will be addressed on a case-by-case specific engagement basis as described below. The Audit Committee will be informed quarterly of the services on the pre- approved list for which the auditor
has been engaged. 

  

	 	•	 	 All requests to engage KPMG for other services will be addressed on a case-by-case specific engagement basis. The Company employee making the request
is to submit the request for service to the Company’s Senior Vice President, Finance. The request for service should include a description of the service, the estimated fee, a statement that the service is not a Prohibited Service and the
reason KPMG is being engaged. 

 For services where the aggregate fees are estimated to be less than or equal to $20,000,
recommendations, in respect of each engagement, will be submitted by Senior Vice President, Finance, the official responsible for coordinating services with KPMG to the chairman of the Audit Committee for consideration and approval. The full Audit
Committee will subsequently be informed of the service, at its next meeting. The engagement may commence upon approval of the chairman of the Audit Committee. For services where the aggregate fees are estimated to be greater than $20,000,
recommendations, in respect of each engagement, will be submitted by the Company’s Senior Vice President, Finance to the full Audit Committee for consideration and approval, generally at its next meeting. The engagement may commence upon
approval of the Committee. 
 External Auditor Service Fees 

The aggregate fees billed for professional services rendered by KPMG for the years ended December 31, 2009 and December 31, 2008 are as follows:

  

							
	 	  	December 31, 2009	  	December 31, 2008
	 Audit Fees
	  	$	67,500	  	$	75,000
	 Audit-Related
Fees(1)
	  	$	63,348	  	$	107,250
	 Tax
Fees(2)
	  	$	66,755	  	$	30,300
	 Total fees
	  	$	197,603	  	$	212,550

  

	(1)	Quarterly reviews, audit of Protiva acquisition in 2008, consultations on the accounting or disclosure treatment of transactions reflected in the financial statements.

	(2)	Tax compliance and tax planning. 

  

 - 27 - 

 Executive Officers 

As at February 28, 2010, the Company has four executive officers. The following table includes name and municipality of residence of each of our
executive officers, the offices held and each officer’s principal occupation. A biography of each executive officer, which includes a five year history of employment, follows under “Biographies of Directors and Executive Officers”.

  

					
	 Name and Municipality of Residence
	  	 Position
	  	 Principal Occupation

			
	 MARK J. MURRAY, PH.D.

Seattle, Washington, U.S.A.
	  	President, Chief Executive Officer and Director	  	Executive of the Company
			
	 IAN C. MORTIMER, M.B.A.

North Vancouver, BC, Canada
	  	Executive Vice President, Finance and Chief Financial Officer	  	Executive of the Company
			
	 IAN MACLACHLAN, PH.D.

Mission, BC, Canada
	  	Executive Vice President and Chief Scientific Officer	  	Executive of the Company
			
	 PETER LUTWYCHE, PH.D.

Vancouver, BC, Canada
	  	Vice President, Pharmaceutical Development	  	Executive of the Company

 Biographies of Directors and
Executive Officers 
 The following are brief biographies of our directors and executive officers. 

Mark J. Murray, Ph.D., President, Chief Executive Officer and Director. Dr. Murray joined Tekmira in May 2008 concurrent with the
closing of the business combination between Tekmira and Protiva. He previously was the President and CEO and founder of Protiva since its inception in the summer of 2000. Dr. Murray has over 20 years of experience in both the R&D and
business development and management facets of the biotechnology industry. Dr. Murray has held senior management positions at ZymoGenetics and Xcyte Therapies prior to joining Protiva. Since entering the biotechnology industry Dr. Murray
has successfully completed numerous and varied partnering deals, directed successful product development programs, been responsible for strategic planning programs, raised over $30 million in venture capital and executed extensive business
development initiatives in the U.S., Europe and Asia. During his R&D career, Dr. Murray worked extensively on three programs that resulted in FDA approved drugs, including the first growth factor protein approved for human use, a program he
led for several years following his discovery. Dr. Murray obtained his Ph.D. in Biochemistry from the University of Oregon Health Sciences University and was a Damon Runyon-Walter Winchell post-doctoral research fellow for three years at the
Massachusetts Institute of Technology. 
 Daniel Kisner, M.D., Chairman. Dr. Kisner is currently a Venture Partner at
Aberdare Ventures. Prior to Aberdare, Dr. Kisner served as President and CEO of Caliper Technologies, a leader in microfluidic lab-on-a-chip technology. He led Caliper from a technology-focused start up to a publicly traded, commercially
oriented organization. Prior to Caliper, he was President and COO of Isis Pharmaceuticals, Inc. Previously, Dr. Kisner was Division VP of Pharmaceutical Development for Abbott Laboratories and VP of Clinical Research and Development at
SmithKline Beckman Pharmaceuticals. In addition, he held a tenured position in the Division of Oncology at the University of Texas, San Antonio School of Medicine and is certified by the American Board of Internal Medicine in Internal Medicine and
Medical Oncology. Dr. Kisner holds a B.A. from Rutgers University and an M.D. from Georgetown University. 
  

 - 28 - 

 Michael J. Abrams, Ph.D., Director. Dr. Abrams has been active in the
research, discovery and development of pharmaceuticals for over 20 years. In 1984, Dr. Abrams joined Johnson Matthey plc and in 1991, was promoted to Manager, Biomedical Research, worldwide for Johnson Matthey. In June 1996 Dr. Abrams
initiated the Canadian venture-backed financing of AnorMED Inc. He is an inventor on the patents that led to the development of the Lantheus technetium-99m heart imaging agent,
Cardiolite® and is a co-inventor on several products currently in clinical trials. He is also a named inventor
on an additional 15 patents and has authored over 60 scientific articles. Dr. Abrams served as a director of AnorMED Inc. until May 2006 and as a director of Migenix Inc. until August 2008 and is currently a director for the Centre for Drug and
Research Development and viDA Therapeutics Inc. and Chairman for Indel Therapeutics Inc. In 2009, Dr. Abrams joined Inimex Pharmaceuticals as President and CEO. He is also an Adjunct Professor at the University of British Columbia. 

Arthur M. Bruskin, Ph.D., Director. Dr. Bruskin is currently an independent consultant in the biotechnology and pharmaceutical
industry. He earned his BA and MA (Microbiology) at the University of Connecticut and his Ph.D. (Biology) at Indiana University. Following his postdoctoral training at the University of California, San Francisco, Dr. Bruksin took a position at
Applied Biotechnology (ABT), a Cambridge, MA biotechnology company where he was responsible for their cancer therapeutic program from 1987 to 1991. Following the merger of ABT with Oncogene Science in 1991 (now OSI Pharmaceuticals (NASDAQ:OSIP)),
Dr. Bruksin held a variety of positions at OSI including Executive Vice President, Global Research. Dr. Bruskin was responsible for all of OSI’s preclinical research in the areas of Oncology and Diabetes and was involved in the
discovery and development of Tarceva. After leaving OSI in 2002, Dr. Bruskin has been the Chief Scientific Officer of Interpath Pharmaceuticals Inc. (2005-2006) and the Chief Operating Officer of Eutropics Pharmaceuticals Inc. (2006-2008) and
part-time Chief Scientific Officer at America Stem Cell, Inc., a privately held biotechnology company (2009-2010). 
 Gary E. Frashier,
M.B.A., P.E., Director. Mr. Frashier is President and Principal of Management Associates, a San Antonio-based consulting firm that provides strategic services to emerging companies in the life sciences field and from 2007 to 2009 was
Executive Vice President, CFO and director of Apex Bioventures Acquisition Corp. Mr. Frashier led Nasdaq-listed OSI Pharmaceuticals Inc., a drug development company with a focus on oncology, from 1990 to 2000 as President and CEO, CEO and
Vice-Chairman, and finally as Chairman. From 1987 to 1990, Mr. Frashier was President and CEO of Genex Corporation. Mr. Frashier currently serves as a director on the Board of Achillion Pharmaceuticals, Inc., a public company and is
Chairman of America Stem Cell, Inc., a private company . He is also an advisor to several venture capital firms. Mr. Frashier has a B.S. in Chemical Engineering from Texas Tech University and an M.S. in Management from the Massachusetts
Institute of Technology and is a Registered Professional Engineer in Texas. 
 Ken Galbraith, C.A., Director. Mr. Galbraith
is currently a General Partner at Ventures West. He joined Ventures West in 2007 and leads the firm’s biotechnology practice. Prior to joining Ventures West, Mr. Galbraith was Chairman and Interim CEO of AnorMED, a biopharmaceutical
company focused on new therapeutic products in hematology, HIV and oncology, until its sale to Genzyme Corp. in a cash transaction worth almost US$600 million. Previously, Mr. Galbraith spent 13 years in senior management with QLT Inc., a
global biopharmaceutical company specializing in developing treatments for eye diseases, retiring in 2000 from his position as Executive VP and CFO. Mr. Galbraith was a founding Director of the BC Biotechnology Alliance and served as Chairman
of the Canadian Bacterial Diseases Network, one of Canada's federally-funded Networks for Centers of Excellence (NCE). He was also a Director of the Michael Smith Foundation for Health Research and the Fraser Health Authority. He currently serves on
the Board of Directors of a number of private biotechnology companies as well as the Vancouver Aquarium Marine Science Centre, one of the world's leading aquariums and Genome BC and has previously served on the Board of Directors of a number of
Nasdaq-listed biotechnology companies, including Cardiome Pharma and Angiotech Pharmaceuticals. Mr. Galbraith earned a Bachelor of Commerce (Honours) degree from the University of British Columbia and is a Chartered Accountant. 

 

 - 29 - 

 James W. Hudson, C.A., Director. Mr. Hudson is the General Manager of Richmond Country
Club, a private country club located in Richmond, B.C. Until November 2004, Mr. Hudson was the Chief Administrative Officer at the Vancouver Police Department. Prior to this Mr. Hudson was Senior Vice President, Finance and Chief Financial
Officer at Kinetek Pharmaceuticals Inc. from 2000 to 2003, where he assumed a lead role in devising and implementing the company’s business development and operating strategies. From 1998 to 1999, Mr. Hudson was Vice President and Chief
Financial Officer at BC Belting, and from 1989 to 1997 he served as Vice President, Finance and Chief Financial Officer at BC Sugar. During that time, Mr. Hudson played key roles in BC Sugar’s 1992 acquisition of Lantic Sugar, raising
equity and a variety of other corporate acquisitions and divestitures. 
 Donald Jewell, C.A., Director. Mr. Jewell is a
Chartered Accountant with over 30 years of business experience. Mr. Jewell spent 20 years with KPMG and at the time of his departure, he was the managing partner in charge of KPMG’s management consulting practice in British Columbia. Until
March 2010 Mr. Jewell was Chairman of Cal Investments Limited, a London based hedge fund. Mr. Jewell is currently the managing director of a private Canadian holding company; Trustee of a two substantial Canadian private trusts; and on the
Board of the trusts’ major operating companies. He is also on the Board of Directors of Lantic Inc. 
 Frank Karbe, Director.
Mr. Karbe is currently the Executive Vice President and Chief Financial Officer of Exelixis, Inc., a Nasdaq-listed biotechnology company. Prior to joining Exelixis in 2004, Mr. Karbe worked as an investment banker for Goldman
Sachs & Co., where he served most recently as Vice President in the healthcare group focusing on corporate finance and mergers and acquisitions in the biotechnology industry. Prior to joining Goldman Sachs in 1997, Mr. Karbe held
various positions in the finance department of The Royal Dutch/Shell Group in Europe. Mr. Karbe holds a Diplom Kaufmann from the WHU—Otto Beisheim Graduate School of Management, Koblenz, Germany (equivalent to a U.S. Masters of Business
Administration). 
 R. Ian Lennox, M.B.A., Director. Mr. Lennox is currently Chairman and CEO of Ricerca Biosciences, LLC, a
contract research organization for the pharmaceutical industry and he is also director of several life sciences companies in North America. From 2000 to 2004, Mr. Lennox held leadership positions at MDS Inc. (“MDS”), first as
president and chief executive officer, drug discovery and development, and later as president and chief executive officer, pharmaceutical and biotechnology markets. Prior to joining MDS, Mr. Lennox was president and chief executive officer of
Phoenix International Life Sciences, a NASDAQ Stock Exchange company, and chairman and chief executive officer of Drug Royalty Corporation, a Toronto Stock Exchange listed company. From 1978 to 1997, Mr. Lennox held progressively senior
managerial positions at Monsanto Company in the U.S., Europe and Latin America, including six years as president and chief executive officer of Monsanto (Canada), based in Toronto. Mr. Lennox has also served as director of a number of life
sciences companies and charitable foundations in North America. Mr. Lennox holds an Honours B.S. degree in physiology and pharmacology and an M.B.A. from the University of Western Ontario. He has also completed the executive management program
in finance at the Columbia School of Business. 
 Ian C. Mortimer, M.B.A., Executive Vice President, Finance and Chief Financial Officer.
Mr. Mortimer became the Chief Financial Officer of Tekmira after its spin-out from Inex Pharmaceuticals Corporation in 2007 and has responsibilities for Finance, Investor Relations, Human Resources and Information Technology. From 2004
to 2007, Mr. Mortimer was Chief Financial Officer of Inex. From 1997 to 2004, Mr. Mortimer held positions of increasing responsibility at Inex including leading Inex’s investor relations efforts and evaluation of product in-licensing
opportunities. In 2004, Mr. Mortimer was recognized as the Best Investor Relations Officer for a Small Cap Company in Canada. He has a B.Sc. in Microbiology from the University of British Columbia, an M.B.A. from Queen’s University and is
a Certified Management Accountant. 
  

 - 30 - 

 Ian MacLachlan, Ph.D., Executive Vice President, Chief Scientific Officer. Dr. MacLachlan
joined Tekmira in 2008 concurrent with the closing of the business combination between Tekmira and Protiva. Dr. MacLachlan was a founder of Protiva in 2000 and led Protiva’s R&D program since the company’s inception. A graduate of
the University of Alberta, where he received both his B.Sc. and Ph.D. in Biochemistry, Dr. MacLachlan spent two years at the Vienna Bio-Center where some of the first experiments in systemic gene delivery were performed. Following this,
Dr. MacLachlan conducted postdoctoral research at the Howard Hughes Medical Institute at the University of Michigan in the laboratory of Dr. Gary Nabel, a pioneer in the development of DNA-based therapeutics. Active in molecular
therapeutics for more than a decade, he joined Protiva after five years leading the development of the gene transfer technology at Inex Pharmaceuticals. Dr. MacLachlan has been an invited speaker on nucleic acid delivery at the National
Institutes of Health, the National Cancer Institute, numerous academic institutions and most major scientific meetings dealing with molecular therapy. He is a member of the New York Academy of Sciences, the Oligonucleotide Therapeutics Society and
the American Society of Gene Therapy and serves on the Editorial Board of the journals Molecular Therapy and Oligonucleotides. 
 Peter
Lutwyche, Ph.D., Vice President, Pharmaceutical Development. Dr. Lutwyche joined Tekmira after the completion of the business combination between Tekmira and Protiva. Dr. Lutwyche joined Protiva in February 2008. His
responsibilities at Tekmira include manufacturing, process development and quality control for all Tekmira product candidates as well as supporting Tekmira’s collaborative partners as they advance products that utilize Tekmira’s
technology. Dr. Lutwyche joined Protiva from QLT Inc., where he was employed for ten years, most recently as Director, Pharmaceutical Development. During his tenure at QLT, Dr. Lutwyche contributed to the development and commercialization
of Visudyne as well as leading manufacturing and chemistry efforts for numerous preclinical and clinical stage products. Prior to QLT, he was a research scientist at Inex Pharmaceuticals Corporation working with lipid-based formulations of nucleic
acids and antibiotics. Dr. Lutwyche holds a Ph.D. in Chemistry from the University of British Columbia. 
 Shareholdings of Directors
and Executive Officers 
 As at February 28, 2010, the directors and executive officers of the Company, as a group, owned or exercised
control or direction over an aggregate of 2,572,059 Common shares (6,486,737 on a fully diluted basis), representing 5.0% (11.2% fully diluted) of the issued and outstanding Common shares of the Company. 

TRANSFER AGENT AND REGISTRAR 

Our registrar and transfer agent is CIBC Mellon Trust Company at Vancouver and Toronto. 

MATERIAL CONTRACTS 
 The
following contracts were entered into other than in the ordinary course of business, are material to the Company and were entered into in the most recent financial year or prior to the most recently completed financial year but remain in effect:

  

	 	•	 	 The License and Collaboration Agreement and Cross-License with Alnylam described under “Partnerships and Collaborations”;

  

 - 31 - 

	 	•	 	 The Manufacturing Agreement with Alnylam described under “Partnerships and Collaborations”; 

 

	 	•	 	 The Product Development Agreement with Roche described under “Partnerships and Collaborations”; 

 

	 	•	 	 The licensing agreement with Merck described under “Partnerships and Collaborations”; 

 

	 	•	 	 The licensing agreement with Hana described under “Partnerships and Collaborations”; 

 

	 	•	 	 The licensing agreement with Aradigm described under “Partnerships and Collaborations”; and 

 

	 	•	 	 The Settlement and Purchase Agreement described under “Other Corporate Developments”. 

The interests of directors and officers of Tekmira in the May 30, 2008 acquisition of Protiva are described in the Company’s Management
Information Circular dated May 1, 2008 and filed at www.sedar.com. 
 INTERESTS OF EXPERTS 

Our consolidated financial statements for the years ended December 31, 2009 and 2008 have been audited by KPMG LLP, Chartered Accountants, our
external auditors. KPMG LLP has confirmed to us that it is independent within the meaning of the Rules of Professional Conduct/Code of Ethics of the Institute of Chartered Accountants of British Columbia. These rules are equivalent or similar to
Rules of Professional Conduct applicable to chartered accountants in the other provinces of Canada. 
 ADDITIONAL INFORMATION

 Additional information relating to our Company may be found on SEDAR at www.sedar.com. Additional information, including directors' and
officers' remuneration and indebtedness, principal holders of our securities and shares authorized for issuance under compensation plans will be contained in our Information Circular for the annual meeting of shareholders to be held later in the
year. Additional financial information is provided in our audited comparative financial statements, and related management’s discussion and analysis, as at and for the year ended December 31, 2009. 

Copies of this Annual Information Form and the documents incorporated by reference therein, the comparative financial statements of the Company
(including the auditors’ report by the Company’s auditors, KPMG) for the year ended December 31, 2009, each interim financial statement issued after December 31, 2008, the Information Circular and the Annual Report may be
obtained upon request from our Chief Financial Officer, 100 – 8900 Glenlyon Parkway, Burnaby, British Columbia, V5J 5J8. 
  

 - 32 - 

 TEKMIRA PHARMACEUTICALS CORPORATION 

AUDIT COMMITTEE CHARTER 

Organization 
 This charter governs the
operations of the audit committee of Tekmira Pharmaceuticals Corporation. The committee shall review and reassess the charter at least annually and obtain the approval of the Board of Directors. The audit committee shall be appointed by the board of
directors and shall comprise at least three directors, each of whom are independent of management and the Company. Members of the committee shall be considered independent if they have no relationship that may interfere with the exercise of their
independent judgment in carrying out their role on the audit committee. All committee members shall be financially literate, or shall become financially literate within a reasonable period of time after appointment to the committee, and at least one
member shall have accounting or related financial management expertise (role of CEO in a public company is interpreted as fulfilling this requirement). Each member of the audit committee consents to provide and disclose a description of their
education and experience that relates to his or her responsibilities as an audit committee member. 
 Statement of Policy 

The audit committee shall provide assistance to the board of directors in fulfilling their oversight responsibility to the shareholders, potential
shareholders, the investment community, and others relating to the Company’s financial statements and the financial reporting process, the systems of internal accounting and financial controls, the annual independent audit of the company’s
financial statements, and the legal compliance programs as established by management and the board. In so doing, it is the responsibility of the committee to maintain free and open communication between the committee, external auditors and
management of the Company. In discharging its oversight role, the audit committee is empowered to investigate any matter brought to its attention with full access to all books, records, facilities, and personnel of the company and the power to
retain outside counsel, or other experts for this purpose. 
 Responsibilities and Processes 

The primary responsibility of the audit committee is to oversee the Company’s financial reporting process on behalf of the board and report the
results of their activities to the board. While the audit committee has the responsibilities and powers set forth in this Charter, it is not the duty of the audit committee to plan or conduct audits or determine that the Company’s financial
statements are in accordance with generally accepted accounting principles. Management is responsible for preparing the Company’s financial statements, and the external auditors are responsible for auditing those financial statements. The
committee in carrying out its responsibilities believes its policies and procedures should remain flexible, in order to best react to changing conditions and circumstances. 

One member of the committee shall be appointed as chair. The chair shall be responsible for leadership of the committee, including scheduling and
presiding over meetings, preparing agendas, and making regular reports to the Board. The chair will also maintain regular liaison with the CFO, CEO and the lead external audit partner. 

The following shall be the principal recurring process of the audit committee in carrying out its oversight responsibilities. The processes are set forth
as a guide with the understanding that the committee may supplement them as appropriate. 
  

 - 33 - 

	 	•	 	 The committee shall have a clear understanding with management and the external auditors that the external auditors are ultimately accountable to the
board and the audit committee, as representatives of the Company’s shareholders. The committee is directly responsible for overseeing the work of the external auditor engaged for the purpose of preparing and issuing an auditor’s report or
performing other audit, review or attest services for the Company, including the resolution of disagreements between management and the external auditor regarding financial reporting. 

 

	 	•	 	 The committee must recommend to the Board of Directors 

 

	 	•	 	 the external auditor to be nominated for the purpose of preparing or issuing an auditor’s report or performing other audit, review or attest
services for the Company; and 

  

	 	•	 	 the compensation of the external auditor. 

  

	 	•	 	 The committee shall discuss with the auditors their independence from management and the Company. In addition, the audit committee will obtain annually
from the external auditor a formal written statement describing all relationships between the auditors and the Company and members of senior management of the Company and will consider the compatibility of non-audit services with the auditor’s
independence. The audit committee will adopt a written policy that sets out the requirement for the pre-approval of all non-audit services to be provided to the Company or its subsidiary entities by the Company’s external auditor.

  

	 	•	 	 The committee shall discuss with the external auditors the overall scope and plans for their audit including the adequacy of staffing and compensation.
Also, the committee shall discuss and evaluate with management and the external auditors the adequacy and effectiveness of the accounting and financial controls, including the Company’s system to monitor and manage business risk and legal
compliance programs. Further, the committee shall meet separately with the external auditors, with and without management present, to discuss the results of their examinations and will provide sufficient opportunity for the external auditors to meet
privately with the members of the committee. 

  

	 	•	 	 The committee shall review the Company’s financial statements, MD&A and annual and interim earnings/loss’ press releases, including the
results of the external auditors’ reviews of this information, with management and the external auditors before the Company publicly discloses this information. 

 

	 	•	 	 As part of its review of the Company’s financial statements, the committee shall review with management and the external auditors the financial
statements to be included in the company’s Annual and Quarterly reports, including their judgment about the quality, not just the acceptability, of accounting principles, the reasonableness of significant judgments (including a review of
particularly sensitive accounting estimates, reserves and accruals, and audit adjustments) and the clarity of the disclosures in the financial statements. Also, the committee shall discuss the results of the annual audit and any other matters
required to be communicated to the committee by the external auditors under generally accepted auditing standards. 

  

	 	•	 	 The committee must satisfy itself that adequate procedures are in place for the review of the Company’s public disclosure of financial information
extracted or derived from the Company’s financial statements, other than the public disclosure referred to in the preceding paragraph, and must periodically assess the adequacy of those procedures. 

 

	 	•	 	 The audit committee must establish procedures for: 

  

	 	•	 	 the receipt, retention and treatment of complaints received by the Company regarding accounting, internal controls, or auditing matters; and

  

 - 34 - 

	 	•	 	 the confidential, anonymous submission by employees of the issuer of concerns regarding questionable accounting or auditing matters.

  

	 	•	 	 The audit committee must review and approve the issuer’s hiring policies regarding partners, employees and former partners and employees of the
present and former external auditor of the Company. 

  

 - 35 -

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00178-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00178-of-00352.parquet"}]]