Document:

EdgarFiling

Exhibit 10.3

 

June 13, 2019

 

Personal & Confidential

William H. Collier

124 Brooke Farm Road

St. Davids, PA 19087

 

Dear Bill:

 

It is my pleasure to offer you the position of President and Chief Executive Officer
of Arbutus Biopharma Corporation (the “Parent”). If you accept this offer of employment, you will be employed by Arbutus
Biopharma Inc., a subsidiary of the Parent (the “Company”), and your expected start date will be June 24, 2019 (your
actual first day of employment being referred to herein as your “Start Date”).

 

		1.	Position and Duties. You will hold the position of President and Chief Executive Officer of the Parent and you
will report to the Board of Directors of the Parent (the “Board”). You will have such duties and responsibilities as
are commensurate with your position, including such duties as are reasonably and appropriately delegated to you from time to time
by the Board, consistent with your position as President and Chief Executive Officer. As President and Chief Executive Officer,
which is a full-time position, you will devote your full working time and efforts to the business and affairs of the Parent. Notwithstanding
the foregoing, you may manage your personal investments or engage in charitable or other community activities, provided that such
engagements, services and activities do not interfere with the performance of your duties hereunder, your obligations hereunder
or represent an actual or apparent conflict of interest with your role at the Parent. You will also serve as President and Chief
Executive Officer of the Company and, if requested by the Board, as an officer or director of any other affiliate of Parent, in
each case for no additional compensation. Your principal office location will be Warminster, PA, and as business conditions allow
you will be able to work remotely from home or elsewhere up to one day per week. You agree that you will travel to such extent
as may be reasonably required in connection with the performance of your duties hereunder.

 

		2.	Board. During the term of your service as President and Chief Executive Officer, you will be nominated for election
to the Board. Your service as a member of the Board, which is subject to Board election and removal provisions under the Company’s
articles, will terminate automatically upon the termination of your employment with the Company for any reason. You agree to tender
your written resignation from the Board, effective as of the date of termination of your employment, no later than the date of
such termination of employment. Upon termination of your employment with the Company for any reason, you will be deemed to have
resigned from all other positions that you hold as an officer or member of the board of directors (or a committee thereof) of the
Parent or any of its affiliates. You will not receive any additional compensation for services as a member of the Board.

 

		3.	Base Salary. Commencing on the Start Date, you will be paid a base salary at the rate of $550,000 per year, which
will be paid in accordance with the Company’s standard payroll policies, but no less frequently than monthly, and subject
to applicable withholdings and other required deductions. Your Base Salary will be reviewed not less frequently than annually and
will be subject to increase (but not decrease) from time to time, as determined by the Board.

 

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		4.	Annual Bonus. You will be eligible to receive an annual bonus based upon the achievement of such corporate and
individual performance goals and other criteria as will be determined by the Board or a designated committee of the Board after
consultation with you from time to time. For the avoidance of doubt, the determination of the corporate and individual performance
goals and other criteria that will apply with respect to your annual bonus will be made by the Board or a designated committee
of the Board, in its sole discretion. Your target annual bonus will be 65% of your Base Salary, as determined by the Board or a
designated committee of the Board (the “Target Bonus”). For calendar year 2019, you will be eligible to earn at least
a pro-rated annual bonus based on the corporate performance goals previously established by the Board with respect to calendar
year 2019. The exact amount of the bonus payable to you for any calendar year during your employment with the Company, including
in respect of calendar year 2019, will be determined by the Board or a designated committee of the Board, in its sole discretion,
and may be less than or greater than the Target Bonus. Any annual bonus payable to you hereunder will be subject to the terms and
conditions of, and paid in a manner consistent with, the bonus plan or practices of the Parent or the Company, as applicable, then
in effect. Except as otherwise provided in Section 10 or Section 11, as applicable, in order to be eligible to earn an annual bonus
in respect of a calendar year, you must remain employed by the Company through the date on which annual bonuses for such calendar
year are paid. The Parent expects that any annual bonuses earned by you during your employment with the Company will be paid to
you by March 15 of the calendar year following the calendar year to which the applicable bonus relates, provided that in no event
will any such annual bonus be paid to you later than the time that annual bonuses are paid to other senior executives of the Parent.

 

		5.	Sign-on Bonus. The Company will pay you a sign-on bonus in the gross amount of $100,000 (the “Sign-On Bonus”),
less such taxes and applicable withholdings as required by law. The Sign-on Bonus will be payable to you in a cash lump sum within
30 days following the Start Date. If, prior to the one-year anniversary of the Start Date, you terminate your employment with the
Company other than for Good Reason or death or disability, then you will promptly repay to the Company 100% of the gross amount
of the Sign-On Bonus. If you are obligated under this Section 5 to repay to the Company the Sign-on Bonus, then the Company may,
in its discretion, off-set all or part of your obligation under this Section 5 against amounts otherwise due to you from the Company.

 

		6.	Sign-on Equity Grants. As an inducement to accepting this offer, you will be granted, as soon as practicable
following the Start Date, but no later than 30 days after the Start Date, an option (the “Sign-on Option”) to purchase
1,112,000 common shares, without par value (the “Common Shares”), of the Parent. The Sign-on Option will be granted
to you pursuant to the inducement grant exception under Nasdaq Rule 5635(c)(4) and not pursuant to the Parent’s 2016 Omnibus
Share and Incentive Plan (the “2016 Plan”) or any other equity incentive plan of the Parent, as an inducement that
is material to your employment with the Company. The Sign-on Option will have an exercise price equal to the closing price of the
Common Shares on the Nasdaq Global Select Market on the grant date. Except as otherwise provided in Section 10 or Section 11, as
applicable, the Sign-on Option will vest as to 25% of the shares subject to such option on the one-year anniversary of the grant
date and as to an additional 1/48th of the total original number of shares subject to such option on the corresponding day of each
month thereafter. With respect to the Sign-on Option, you must remain employed with the Company through the applicable vesting
date in order to vest in the applicable portion of such award, except as otherwise provided herein. The Sign-on Option will be
subject to such other terms as are customary for Parent options under the 2016 Plan and a form of option award agreement approved
by the Board or a designated committee thereof. The Board or a designated committee of the Board will consider annually whether
to grant additional equity awards to its employees and you will be eligible to be considered for such additional annual equity
grants on the same basis as other senior executives of the Parent or the Company.

 

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		7.	Employee Benefits. You will be entitled to participate in or receive benefits consistent with other senior executives
under the Parent’s or the Company’s employee benefit plans as they may be adopted and amended from time to time, subject
to the terms and conditions of those employee benefit plans. You should note that the Parent or the Company, as applicable, may
modify or terminate benefits from time to time as it deems necessary or appropriate. You will be entitled to paid vacation each
year, in addition to sick leave and observed holidays, in accordance with the policies and practices of the Parent or the Company,
as applicable, as may be amended from time to time. Vacation may be taken at such times and intervals as you determine, subject
to the business needs of the Parent and the Company. For the duration of your employment with the Company and/or the Parent, the
Parent or the Company will provide you with Directors and Officers liability insurance at no cost to you on the same basis as such
insurance is provided to other senior executives of the Parent.

 

		8.	Expenses. You will be entitled to receive prompt reimbursement for all reasonable expenses incurred by you in
performing your duties hereunder, in accordance with the policies and procedures then in effect and established by the Parent or
the Company, as applicable, for its senior executives.

 

		9.	At-Will Employment. Your employment with the Company will be “at-will,” meaning that your employment
is not guaranteed for any specified period, and that either the Company or you may terminate your employment at any time for any
reason, with or without cause, and with or without advance notice, subject to the provisions of Sections 10 and 11 of this letter
(this “Letter”). The at-will nature of your employment cannot be changed except through a writing signed by both you
and an authorized representative of the Company.

 

		10.	Severance upon Termination Without Cause or Resignation for Good Reason. Except as provided in Section 11 below,
in the event that the Company terminates your employment without Cause (as defined below), or you resign for Good Reason (as defined
below), the Company will pay you, or provide you with, the Accrued Benefits (as defined below) on or before the time required by
law, but in no event more than 30 days after your date of termination. In addition, subject to your providing the Company with
a fully effective general release of claims substantially in the form attached hereto as Exhibit A (the “Release”)
within the 60-day period following the date of your termination of employment, the Company will: (i) pay you severance pay in a
lump sum in cash in an amount equal to 18 months of your then current Base Salary, payable within 60 days after the date of your
termination of employment, but if that 60-day period extends over two calendar years, the Company will make the payment in the
second calendar year, (ii) pay you a bonus payment equal to the lesser of (y) your Target Bonus pro-rated for the portion of the
year you were employed by the Company prior to your termination or (z) the average of the bonus payments, if any, actually made
to you with respect to the previous three (3) calendar years preceding the date of your termination of employment, disregarding
entirely any previous prorated bonus and any previous year for which you were paid no bonus, and pro-rated for the portion of the
year you were employed by the Company prior to your termination, payable within 60 days after the date of your termination of employment,
but if that 60-day period extends over two calendar years, the Company will make the payment in the second calendar year, (iii)
provided that you timely elect continuation coverage under the Consolidated Omnibus Reconciliation Act of 1985 (“COBRA”),
reimburse you for the COBRA premiums paid by you, if any, for the continuation of coverage under your then-existing group company
health plan that you and your dependents are eligible to receive for the earlier of a period of up to 18 months from the date of
your termination of employment, or until you become eligible to receive health insurance benefits under any other employer’s
group health plan, and (iv) cause the immediate vesting and exercisability on a pro-rata basis of your Sign-on Option, prorated
at 1/48th of the total original number of shares subject to the Sign-on Option grant for each completed month of service as of
your date of termination, with the vested portion of the Sign-on Option remaining exercisable by you, your estate or your estate’s
personal representative, as applicable, until the earlier of the original expiration date of the Sign-on Option and the ninetieth
(90th) day following the date of your termination of employment (or, if you die during such ninety (90) day period,
the first anniversary of the date of your termination of employment). Your rights upon termination, resignation, death or disability
as to stock or option grants or other long-term incentive grants made to you in addition to the Sign-On Options, if any, will be
determined at the time of grant.

 

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		11.	Severance upon Termination Without Cause or Resignation for Good Reason in Connection with a Change in Control.
If within 12 months following a Change of Control (as defined in the 2016 Plan or any successor plan) (i) the Company terminates
your employment with the Company other than for Cause, or (ii) you resign from your employment with the Company for Good Reason,
then the Company will pay you, or provide you with, the Accrued Benefits on or before the time required by law, but in no event
more than 30 days after your date of termination. In addition, in lieu of paying you the amounts set forth in Section 10, subject
to your providing the Company with a fully effective Release within the 60-day period following the date of your termination of
employment, the Company will: (i) pay you severance pay in a lump sum in cash in an amount equal to your then current Base Salary
multiplied by 2.0, payable within 60 days after the date of your termination of employment, but if that 60-day period extends over
two calendar years, the Company will make the payment in the second calendar year, (ii) pay you a bonus payment equal to your Target
Bonus pro-rated for the portion of the year you were employed by the Company prior to your termination, payable within 60 days
after the date of your termination of employment, but if that 60-day period extends over two calendar years, the Company will make
the payment in the second calendar year, (iii) provided that you timely elect continuation coverage under COBRA, reimburse you
for the COBRA premiums paid by you, if any, for the continuation of coverage under your then-existing group company health plan
that you and your dependents are eligible to receive for the earlier of a period of up to 18 months from the date of your termination
of employment, or until you become eligible to receive health insurance benefits under any other employer’s group health
plan, and (iv) cause all as yet unvested stock options and other stock-based awards granted on or after your Start Date and held
by you to immediately accelerate, vest, and become fully exercisable or nonforfeitable, with the vested portion of any such stock
options remaining exercisable by you, your estate or your estate’s personal representative, as applicable, until the earlier
of the original expiration date of the stock option and the ninetieth (90th) day following the date of your termination of employment
(or, if you die during such ninety (90) day period, the first anniversary of the date of your termination of employment).

 

		12.	Termination for Cause, Death or Disability, or Resignation without Good Reason. If the Company terminates your
employment for Cause, or on account of your death or disability, or you resign your employment with the Company for other than
Good Reason, then the Company shall (i) pay to you, or provide you with, all of the Accrued Benefits on or before the time required
by law, but in no event more than 30 days after your date of termination, except that if the Company terminates your employment
for Cause or you resign your employment with the Company for other than Good Reason, your Accrued Benefits will not include any
earned but unpaid annual Target Bonus for the prior fiscal year, and (ii) make available to you the right to continue your group
health insurance coverage at your cost consistent with and to the extent required by the federal COBRA law.  

 

		13.	Release. The Company’s obligations to pay or provide you with the payments and benefits set forth in Section
10 or Section 11, as applicable, will be contingent upon your execution of and compliance with the Release, which Release must
be signed and any applicable revocation period with respect thereto must have expired by the sixtieth (60th) day following the
date of termination (i.e., last employment day with the Company). In addition, you must comply with all post-employment obligations,
including those in Section 16 and in the Confidential Information Agreement (as defined below) that you will sign as a condition
of employment, in order to be entitled to the payments and benefits set forth in Section 10 or Section 11, as applicable. In the
event that you are in breach of any post-employment obligations, the Company will not pay or provide you with any unpaid severance
payments or benefits under Section 10 or Section 11, as applicable. The Company’s obligations to pay or provide the severance
payments or benefits under Section 10 or Section 11, as applicable, will be contingent upon your having tendered your resignation
from the Board (and any other boards on which you serve at the request of the Company), effective as of the date of your termination
of employment.

 

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		14.	Definitions. For purposes of this Letter, “Accrued Benefits” means, as of the date of your termination
of employment, (i) any unpaid expense reimbursements submitted to the Company in accordance with the Company’s policies;
(ii) any accrued but unused vacation to the extent payment is required by law or Company policy; (iii) any vested benefits you
may have under any employee benefit plan of the Company; (iv) any earned but unpaid Base Salary and (v) any earned but unpaid annual
Target Bonus, for the prior fiscal year.

 

For purposes of this Letter, “Cause” means (i) an act of material
dishonesty involving the Company, embezzlement, or misappropriation of assets or property of the Company; (ii) gross negligence
or willful misconduct in connection with the performance of your duties, theft, fraud or breach of fiduciary duty to the Company;
(iii) your sustained or repeated failure to substantially perform the duties or obligations of your position (other than due to
illness or injury); (iv) a violation of federal or state securities law; (v) the conviction of a felony or any crime involving
moral turpitude, including a plea of nolo contendere; (vi) a material breach of any of the Company’s written policies
related to conduct, ethics, equal employment or harassment; or (vii) a material breach of this Letter or your Confidential Information
Agreement. Except for an act, failure or misconduct which, by its nature, cannot reasonably be expected to be cured, as determined
by the Board, or for a termination under clause (v), you will have 30 days from the delivery of a written notice by the Company
within which to cure any acts constituting Cause, which notice will detail the specific act or acts that serve as the basis for
the termination for Cause. For purposes of this Letter, an act, or failure to act, will not be deemed to be “willful”
unless it is done, or omitted to be done, by you in bad faith or without a reasonable belief that the action or omission was in
the best interests of the Company.

 

For purposes of this Letter, “Good Reason” means, without your
prior written consent, (i) a material diminution in your title, duties, authority or responsibilities, (ii) any reduction in your
Base Salary or Target Bonus opportunity, (iii) a relocation of your principal place of employment by more than fifty (50) miles
from Warminster PA, (iv) a material change in reporting so that you no longer report directly to the Board, or (v) any action or
inaction that constitutes a material breach of this Letter by the Company. In order to invoke a termination for Good Reason, you
must deliver a written notice of the grounds for such termination to the Company within 90 days of the initial existence of the
event giving rise to Good Reason and the Company will have 30 days to cure the circumstances. In order to terminate your employment,
if at all, for Good Reason, you must terminate employment within 60 days following the end of the cure period if the circumstances
giving rise to Good Reason have not been cured.

 

		15.	Section 280G. Anything in this Letter to the contrary notwithstanding, if the amount of any compensation, payment,
acceleration, benefit, or distribution by the Parent or the Company to you or for your benefit, whether paid or payable or distributed
or distributable pursuant to the terms of this Letter or otherwise, calculated in a manner consistent with Section 280G of the
Code and the applicable regulations thereunder (the “Payments”), would be subject to the excise tax imposed by Section
4999 of the Code, then the Payments will be reduced (but not below zero) to the extent necessary so that the sum of all Payments
does not exceed the Threshold Amount (as defined below), but if the after-tax amount that you would receive if there were no reduction
pursuant to this section (including any federal, state, and local taxes) exceeds the after-tax amount that you would receive if
the Payments were reduced below the Threshold Amount, the Payments will not be so reduced. If Payments are required to be reduced,
the Payments will be reduced in the following order: (1) cash payments not subject to Section 409A of the Code; (2) cash payments
subject to Section 409A of the Code; (3) equity-based payments and acceleration; and (4) non-cash forms of benefits. For the purposes
of this Section 15, “Threshold Amount” means three times your “base amount” within the meaning of Section
280G(b)(3) of the Code and the regulations promulgated thereunder less one dollar ($1.00). The determinations under this Section
15 will be made by a nationally recognized accounting firm or an actuarial, benefits or compensation consulting firm with expertise
in the area of executive compensation tax law, who will be selected by the Company and will be acceptable to you (your acceptance
not to be unreasonably withheld) (the “280G Firm”), and whose fees and disbursements will be paid by the Company. The
Company will direct the 280G Firm to submit any determination it makes under this Section 15 and detailed supporting calculations
to both you and the Company as soon as reasonably practicable.

 

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		16.	Non-Competition and Non-Solicitation.

 

		A.	You acknowledge that the Company’s industry is highly competitive and employees leaving the employ of the Company have
the ability to cause significant damage to the Company’s interests if they join a competing business immediately upon leaving
the Company.

 

		B.	Definitions:

 

		i.	“Affiliate” means any person or entity directly or indirectly controlling, controlled by or under common control
with the Company, where control may be by either management authority or equity interest.

 

		ii.	“Business” or “Business of the Company” means (a) researching, developing, producing and marketing
any treatment for hepatitis B virus infection in humans or (b) any other treatment area in which the Company has an active research
and development program on the date your employment terminates and in connection with which you directly provided service or had
direct supervisory responsibilities.

 

		iii.	“Competing Business” means any endeavor, activity or business which is competitive in any material way with the
Business of the Company worldwide.

 

		iv.	“Contact” means any person, firm, corporation or other entity that was a client, customer, supplier, principal,
shareholder, investor, collaborator, strategic partner, licensee, contact or prospect of the Company (or of its partners, funders
or Affiliates) with whom you dealt or otherwise became aware of during the term of your employment in any capacity with the Company.

 

		v.	“Restricted Period” means the eighteen (18) month period commencing immediately after your employment terminates.

 

		C.	Reasonableness. You hereby acknowledge and agree that: (i) both before and since the Start Date the Company has operated
and competed and will operate and compete worldwide, with respect to the Business of the Company; (ii) competitors of the Company
and the Business are located worldwide; (iii) in order to protect the Company adequately, any enjoinder of competition would have
to apply to any country in which the Company, during the term of your employment, had material business relationships; (iv) during
the course of your employment with the Company, on behalf of the Company, you will acquire knowledge of, and will come into contact
with, initiate and establish relationships with, both existing and new clients, customers, suppliers, principals, contacts and
prospects of the Company, and that in some circumstances you may become the senior or sole representative of the Company dealing
with such persons; and (v) in light of the foregoing, the provisions of this Section 16 are reasonable and necessary for the proper
protection of the Business of the Company.

 

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		D.	Restrictive Covenant. Except as set forth on Exhibit B attached hereto, during the term of your employment and
for the Restricted Period after the termination thereof, you will not, without the advance written consent of the Board, such consent
to be granted or withheld in the Board’s sole discretion, within the geographic scope of any country in which the Company,
during the term of your employment, had material business relationships, carry on or be employed by or engaged in or have any financial
or other interest in or be otherwise commercially involved in a Competing Business, directly or indirectly, either individually
or in partnership or jointly or in conjunction with any person, firm, corporation or other entity, as principal, agent, consultant,
advisor, employee, shareholder or in any manner whatsoever. As soon as reasonably practicable following your termination of employment
with the Company for any reason, the Parent or the Company will provide you with a list of the companies that, to its knowledge,
are, or are engaged in, a Competing Business as of the date of your termination of employment, and a list of the countries in which
the Company had material business relationships during the term of your employment with the Company (the “Non-Competition
List”). The Parent agrees that the Parent or the Company will provide you with an updated Non-Competition List upon your
request, within ninety (90) days following any such request. For the avoidance of doubt, the Parent and you acknowledge and agree
that the Non-Competition List is only based upon the knowledge of the Company or the Parent and that there may be other third parties
that are, or are engaged in, a Competing Business and the third parties that are, or are engaged in, a Competing Business may change
following the date of your termination of employment.

 

		E.	Exception. You will not be in default of Section 16(d) by virtue of you:

 

		i.	following the termination of employment, holding, strictly for portfolio purposes and as a passive investor, no more than five
percent (5%) of the issued and outstanding shares of, or any other interest in, any corporation or other entity that is a Competing
Business; or

 

		ii.	during the term of your employment, holding, strictly for portfolio purposes and as a passive investor, issued and outstanding
shares of, or any other interest in, any corporation or other entity, the business of which corporation or other entity is in the
same Business as the Company provided such corporation is not a Competing Business, and provided further that you first obtain
the Company’s written consent, which consent will not be unreasonably withheld.

 

If you hold issued and outstanding shares or any other interest in a corporation
or other entity pursuant to Section 16(e)(ii) above, and following the acquisition of such shares or other interest the business
of the corporation or other entity becomes a Competing Business, you will promptly dispose of your shares or other interest in
such corporation or other entity.

 

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		F.	Non-Solicitation. You will not, during the term of your employment and for the Restricted Period after the termination
thereof for any reason, whether legal or illegal, either individually or in partnership or jointly or in conjunction with any person,
firm, corporation or other entity, as principal, agent, consultant, advisor, employee, shareholder or in any manner whatsoever,
without the prior written and informed consent of the Company, directly or indirectly:

 

		i.	solicit, induce or encourage any Contact to curtail or cease its relationship with the Company, for any purpose which is competitive
with the Business; or

 

		ii.	accept (or procure or assist the acceptance of) any business from any Contact if such business is competitive with the Business;
or

 

		iii.	be employed by or supply (or procure or assist the supply of) any goods or services to any Contact for any purpose which you
know or have reason to know is competitive with the Business; or

 

		iv.	employ, engage, offer employment or engagement to or solicit the employment or engagement of or otherwise entice away from
or solicit, induce or encourage to leave the employment or engagement of the Company, any individual who is employed or engaged
by the Company at the time of any such offer, solicitation or enticement whether or not such individual would commit any breach
of his contract or terms of employment or engagement by leaving the employ or the engagement of the Company, provided that you
will be permitted, solely in a personal capacity, to provide letters of reference for individuals who are employed by the Company.

 

		G.	Validity. You expressly recognize and acknowledge that it is the intent of the parties that your activities following
the termination of your employment with the Company be restricted in the manner described in this Section 16, and acknowledges
that good, valuable, and sufficient consideration has been provided in exchange for such restrictions. You agree that should any
of the restrictions contained in this Section 16 be found to be unreasonable to any extent by a court of competent jurisdiction
adjudicating upon the validity of the restriction, whether as to the scope of the restriction, the area of the restriction or the
duration of the restriction, then such restriction will be reduced to that which is in fact declared reasonable by such court,
or a subsequent court of competent jurisdiction, requested to make such a declaration, in order to ensure that the intention of
the parties is given the greatest possible effect.

 

		17.	Section 409A. The payments and benefits under this Letter are intended to comply with or be exempt from Section
409A of the Code, and the regulations and guidance promulgated thereunder (collectively, “Section 409A”) and this Letter
will be interpreted and construed in a manner intended to comply therewith. For purposes of this Letter, you will be considered
to have experienced a termination of employment only if you have a “separation from service” with the Company and all
of its controlled group members within the meaning of Section 409A. Whether you have a separation from service will be determined
based on all of the facts and circumstances and in accordance with the guidance issued under Section 409A. Each payment under this
Letter, including each installment payment, will be considered a separate and distinct payment. If you are a “specified employee”
(as that term is used in Section 409A) on the date of your separation from service, any benefits payable under this Letter that
constitute non-qualified deferred compensation subject to Section 409A will be delayed until the earlier of (i) the first business
day following the six-month anniversary of the date of your separation from service, or (ii) the date of your death, but only to
the extent necessary to avoid the adverse tax consequences and penalties under Section 409A. On the earlier of (x) the first business
day following the six-month anniversary of the date of your separation from service, or (y) your death, the Company will pay you
(or your estate or beneficiaries) a lump-sum payment equal to all payments deferred pursuant to the preceding sentence. If any
of the reimbursements or in-kind benefits provided for under this Letter are subject to Section 409A, the following rules will
apply: (i) in no event will any such reimbursement be paid after the last day of the taxable year following the taxable year in
which the expense was incurred; (ii) the amount of such reimbursable expenses incurred, or the provision of in-kind benefits, in
one tax year will not affect the expenses eligible for reimbursement or the provision of in-kind benefits in any other tax year;
and (iii) the right to such reimbursement for expenses or provision of in-kind benefits is not subject to liquidation or exchange
for any other benefit.

 

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		18.	Employee Confidentiality and Proprietary Rights Agreement. You will be required, as a condition of your employment
with the Company, to sign the Company’s enclosed standard Employee Confidentiality and Proprietary Rights Agreement (the
“Confidential Information Agreement”).

 

		19.	Withholding and Required Deductions. All forms of compensation referred to in this Letter are subject to all
withholding and any other deductions required by applicable law.

 

		20.	Representations; Entire Agreement; Amendment; Waiver and Governing Law. By signing below, you represent that
you are not bound by any employment contract, restrictive covenant or other restriction preventing or limiting you from entering
into employment with or carrying out your responsibilities for the Parent and the Company, or which is in any way inconsistent
with the terms of this Letter. You also agree that you will not disclose to anyone at the Parent or the Company, bring onto Company
premises, or use in the course of your employment at the Company, any confidential information or trade secrets belonging to any
former employer or to any other entity. This Letter (and the Confidential Information Agreement, plans, documents, and policies
referenced herein) will constitute our entire agreement regarding the terms and conditions of your employment with the Company
and will supersede any prior agreements or other promises or statements (whether oral or written) regarding the terms of your employment.
The terms described herein cannot be modified except in writing by you and the Company. Failure of either party to this Letter
to insist upon strict compliance with any of the terms, covenants or conditions hereof will not be deemed a waiver of such terms,
covenants or conditions. This Letter will be governed by and construed according to the laws of the Commonwealth of Pennsylvania
without giving effect to the conflict of laws principles of that state. By signing below, the parties mutually intend to be legally
bound by the terms and conditions of this Letter.

 

		21.	Counterparts. This Letter may be executed in two or more counterparts, each of which will be deemed an original,
but all of which together will constitute one and the same instrument. Execution of a facsimile or scanned image will have the
same force and effect as execution of an original, and an electronic or facsimile signature or scanned image will be deemed an
original and valid signature.

 

[Signature Page Follows]

 

 

 

 

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If you wish to accept this offer, please sign this Letter and return it to me.

 

Sincerely,

 

ARBUTUS BIOPHARMA CORPORATION

 

/s/ Frank Torti, MD                                              

Frank Torti, MD

Chairman of the Board of Directors

 

 

ACCEPTED AND AGREED:

 

/s/ William H. Collier                          

William H. Collier

 

 

 

 

 

 

 

 

    
[Offer Letter Signature Page]

     

    

EXHIBIT A

 

GENERAL RELEASE

 

As consideration for your receipt of the severance payments and benefits set forth in
Section 10 or Section 11, as applicable, of the letter agreement between you and Arbutus Biopharma Corporation (the “Parent”),
dated as of June 13, 2019 (the “Letter Agreement”), you, for you and your attorneys, heirs, executors, administrators,
successors and assigns, do hereby fully and forever release and discharge the Parent and its past, current and future subsidiaries
and affiliates, including, without limitation, Arbutus Biopharma Inc. (the “Company”), as well as each of their predecessors,
successors and assigns, and each of their past, current and former directors, officers, partners, agents, employees, attorneys,
shareholders and administrators (collectively, the “Released Parties”), from all suits, causes of action, and/or claims,
demands or entitlements of any nature whatsoever, whether known, unknown, or unforeseen, which you have or may have against any
of them arising out of or in connection with your employment with the Company, the termination of your employment with the Company,
or any event, transaction, or matter occurring or existing on or before the date of your signing of this general release (this
“Release”). You agree not to file or otherwise institute any claim, demand or lawsuit seeking damages or other relief
and not to otherwise assert any claims, demands or entitlements that are released herein. You further hereby irrevocably and unconditionally
waive any and all rights to recover any relief or damages concerning the claims, demands or entitlements that are released herein.
You represent and warrant that you have not previously filed or joined in any such claims, demands or entitlements against the
Parent or the other persons or entities released herein and that you shall indemnify and hold them harmless from all liabilities,
claims, demands, costs, expenses and/or attorney’s fees incurred as a result of any such claims, demands or lawsuits. This
Release shall become effective when signed by you and the Revocation Period (as defined below) expires without revocation by you.

 

This Release specifically includes, but is not limited to, all claims of breach of contract
(including all claims for breach of the Letter Agreement), employment discrimination (including but not limited to any claims coming
within the scope of Title VII of the Civil Rights Act, the Age Discrimination in Employment Act, the Older Workers Benefit Protection
Act, the Equal Pay Act, the Americans with Disabilities Act, and the Family and Medical Leave Act, all as amended, or any other
applicable federal, state or local law), claims under the Worker Adjustment and Retraining Notification Act, claims under the Sarbanes-Oxley
Act of 2002, including the Corporate and Criminal Fraud Accountability Act, claims under the Employee Retirement Income Security
Act of 1974, as amended, claims for wrongful discharge in violation of public policy, claims under the Pennsylvania Human Relations
Act, and claims under the Pennsylvania Whistleblower Law, all as amended, claims for breach of express or implied contract, claims
concerning recruitment, hiring, termination, salary rate, severance pay, wages or benefits due, share options, bonuses, incentive
compensation, equity-based incentives, perquisites, sick leave, holiday pay, vacation pay, life insurance, disability benefits,
group medical insurance, any other fringe benefits, termination, employment status, libel, slander, defamation, intentional or
negligent misrepresentation and/or infliction of emotional distress, together with any and all tort, contract, or other claims
which might have been asserted by you or on your behalf in any suit, charge of discrimination, or claim against the Parent or the
persons or entities released herein. Notwithstanding anything herein to the contrary, nothing herein shall constitute a waiver
or release of (i) any right to indemnification or director and officer liability insurance coverage that you may have, (ii) any
claims that you may have to vested payments or benefits pursuant to the Letter Agreement or any plan, program or arrangement of
the Parent or the Company in which you participated, or (iii) any claims relating to any rights you may have to payments pursuant
to Section 10 or Section 11, as applicable, of the Letter Agreement.

 

    A-1

     

    

You acknowledge that different or additional facts may be discovered in addition to what
you now know or believe to be true with respect to the matters released in this Release, and this Release shall be and remain in
effect in all respects as a complete and final release of the matters released, notwithstanding any different or additional facts.
However, notwithstanding the foregoing, nothing in this Release shall be construed to waive any right that is not subject to waiver
by private agreement, including, without limitation, any claims arising under state unemployment insurance or workers compensation
laws. You understand that rights or claims under the Age Discrimination in Employment Act that may arise after you execute this
Release are not waived. Likewise, nothing in this Release shall be construed to prohibit you from filing a charge with or participating
in any investigation or proceeding conducted by the EEOC, NLRB, or any comparable state or local agency, or from reporting a possible
violation of law to a government entity or law enforcement, including making a disclosure that is protected under the whistle blower
protections of applicable law. Notwithstanding the foregoing, you agree to waive your right to recover against the Released Parties
individual relief in any charge, complaint, or lawsuit filed by you or anyone on your behalf.

 

In signing this Release, you acknowledge:

 

		1.	That you have not suffered any job-related wrongs or injuries, such as any type of discrimination, for which you might still
be entitled to compensation or relief in the future. Except as otherwise set forth in the Letter Agreement, you have been paid
all wages, compensation and benefits, and other amounts that the Parent or any Released Party should have paid you in the past.

 

		2.	That you are not aware of any unlawful conduct by the Parent, the Company or any of their respective directors, officers or
employees.

 

		3.	That you are intentionally releasing claims that you did not know that you might have and that, with hindsight, you might regret
having released. You have not assigned or given away any of the claims you are releasing.

 

		4.	That you have read and understand this Release and that you have been advised to consult with an attorney about its meaning
and effect and have done so.

 

		5.	That you are releasing all claims against the Released Parties, whether known or unknown, knowingly and voluntarily and without
duress, coercion or undue influence of any kind.

 

You acknowledge that you have been given an opportunity of twenty-one (21) days to consider
whether to sign this Release and that you have been advised by the Parent to discuss fully the terms of this Release with legal
counsel of your own choosing. You also acknowledge that you shall not execute this Release prior to the date of your termination
of employment with the Company, and if you do this Release shall be deemed null and void. Moreover, for a period of seven (7) days
following your execution of this Release (the “Revocation Period”), you shall have the right to revoke the waiver of
claims arising under the Age Discrimination in Employment Act, a federal statute that prohibits employers from discriminating against
employees who are age 40 or over. If you elect to revoke this Release in whole or in part within the Revocation Period, you must
inform the Parent by delivering a written notice of revocation to the Parent’s Chairman of the Board, c/o Arbutus Biopharma
Corporation, 701 Veterans Circle, Warminster, PA 18974, no later than 11:59 p.m. on the seventh calendar day after you sign this
Release. You understand that, if you elect to exercise this revocation right, the Parent and the Company shall be relieved of all
obligations to pay or provide the severance payments and benefits set forth in Section 10 or Section 11, as applicable, of the
Letter Agreement. You may, if you wish, elect to sign this Release prior to the expiration of the 21-day consideration period,
and you agree that if you elect to do so, your election is made freely and voluntarily and after having an opportunity to consult
counsel.

 

    A-2

     

    

PLEASE READ CAREFULLY. THIS RELEASE INCLUDES A RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS.

 

ACCEPTED AND AGREED

 

 

____________________________________________________

William H. Collier                                                            Date

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    A-3

     

    

EXHIBIT B

 

EXISTING CONFLICTS

 

If applicable, you are to describe, in specific terms, any ongoing business relationship
with any organization. Please provide a copy of any agreement(s) you might have with said organization(s) that creates a business
relationship described in Section 16(d).

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

B-1EdgarFiling

Exhibit 10.4

 

 

INDEMNITY AGREEMENT

 

 

 

THIS AGREEMENT, having an effective date of ____, _____ (“Effective Date”),
is entered into BY and BETWEEN:

 

ARBUTUS BIOPHARMA CORPORATION, a company duly incorporated
under the laws of the Province of British Columbia, and having an office at 701 Veterans Circle, Warminster, PA 18974

 

(the “Indemnitor”)

 

AND:

 

__________________, with an address ______________________

 

(the “Indemnitee”)

 

WHEREAS:

 

		(A)	the Indemnitor has requested the Indemnitee to act as a director or officer of the Indemnitor and
may ask the Indemnitee to act in a similar capacity with affiliates of the Indemnitor; and

 

		(B)	the Indemnitee has agreed, subject to the granting of the indemnities and releases herein provided
for, to act as a director or officer of the Indemnitor and act in a similar capacity with affiliates of the Indemnitor if requested;

 

NOW THEREFORE in consideration of these premises, the mutual
covenants and agreements herein contained and other good and valuable consideration, the receipt and sufficiency of which is acknowledged
by each of the parties hereto, the parties hereto covenant and agree as set forth below.

 

		1.	INDEMNITY

 

1.1                                     
Subject to §1.2, and §2.6(b) below the Indemnitor shall indemnify and save harmless the Indemnitee, and the Indemnitee’s
successors, heirs and personal representatives (together with the Indemnitee, the “Indemnified Parties”) against and
from:

 

(a)              
any and all actions and claims, whether current, threatened, pending or completed, whether civil, criminal, quasi-criminal
or administrative, of every nature and kind whatsoever which may be brought or made by any person, firm, corporation or government,
or by any governmental department, body, commission, board, bureau, agency or instrumentality against the Indemnified Parties in
connection with the Indemnitee’s execution of the duties of his office held as a director or officer with the Indemnitor
or any affiliate of the Indemnitor from time to time;

 

     

     -2-

    

(b)              
any and all costs, damages, charges, expenses (including legal fees and disbursements, on a full indemnity basis), fines,
liabilities (statutory or otherwise), losses and penalties which the Indemnitee may sustain, incur or be liable for in consequence
of his acting as a director or officer of the Indemnitor or any affiliate of the Indemnitor from time to time, whether sustained
or incurred by reason of the Indemnitee’s negligence, default, breach of duty, breach of trust, failure to exercise due diligence
or otherwise in relation to the Indemnitor or any of its affiliates from time to time, or any of their respective affairs;

 

(c)              
without in any way limiting the generality of the foregoing, any and all costs, damages, charges, expenses (including legal
fees and disbursements on a full indemnity basis), fines, liabilities, losses and penalties which the Indemnified Parties may sustain,
incur or be liable for as a result of or arising by operation of statute and incurred by or imposed upon the Indemnified Parties
in relation to the affairs of the Company in the Indemnitee’s capacity as director or officer, including but not limited
to, all statutory obligations to creditors, employees, suppliers, contractors, subcontractors and any government or agency or division
of any government, whether federal, provincial, state, regional or municipal whether existing at the date hereof or incurred hereafter;
and

 

(d)              
without in any way limiting the generality of the foregoing, the Indemnitor agrees that should any payment or reimbursement
made pursuant to this Agreement, including without limitation the payment of insurance premiums or any payment made by an insurer
under an insurance policy, be deemed to constitute a taxable benefit or otherwise be or become subject to any tax or levy upon
the Indemnified Parties, then the Indemnitor shall pay such amount as may be necessary to ensure that the amount received by or
on behalf of the Indemnified Parties, after the payment of or withholding for such tax, fully reimburses the Indemnified Parties
for the actual cost, expense or liability incurred by or on his or her behalf.

 

1.2                                     
Notwithstanding the provisions of §1.1, the Indemnitor shall not be obligated to indemnify or save harmless the Indemnified
Parties against and from any action, claim, cost, damage, charge, expense, fine, liability, loss or penalty:

 

(a)              
if in respect thereof the Indemnitee failed to act honestly and in good faith with a view to the best interests of the Indemnitor
or its affiliate as the case may be;

 

(b)              
in the case of a criminal or administrative action or proceeding, if the Indemnitee did not have reasonable grounds for
believing that his conduct was lawful;

 

(c)              
arising out of any act, error or omission of the Indemnitee that is fraudulent or malicious and that is committed by the
Indemnitee with actual fraudulent or malicious purpose or intent; or

 

(d)              
for which he is entitled to indemnity pursuant to any valid and collectible policy of insurance, to the extent of such insurance.
Where partial indemnity is provided by such policy of insurance, the obligation of the Indemnitor under §1.1 shall continue
in effect but be limited to that portion of the liability for which indemnity is not provided by such policy.

 

     

     -3-

    

1.3                                     
The determination of any claim by judgment, order, settlement or conviction, or upon a plea of “nolo contendere”
or its equivalent, will not, of itself, create any presumption for the purposes of this Agreement that the Indemnitee did not act
honestly and in good faith with a view to the best interests of the Indemnitor or with the care, diligence, and skill of a reasonably
prudent person or, in the case of a criminal or administrative action or proceeding, that he did not have reasonable grounds for
believing that his conduct was lawful (unless the judgment or order of a court specifically finds otherwise) or that the Indemnitee
had committed wilful neglect or gross default.

 

		2.	DEFENSE

 

2.1                                     
For the purposes of this section 2:

 

“Action” means any action, inquiry,
investigation, suit or other proceeding before a court or other tribunal in which a Claim is brought, made or advanced by or against
the Indemnitee;

 

“Claim” means any allegation of charge,
claim, cost, damage, expense, fine, liability, loss or penalty contemplated by §1.1;

 

“Judgment” means an award of damages
or other monetary compensation made in an Action or any amounts the Indemnitee is ordered to pay by any court or other tribunal
or any government, governmental department, body, commission, board, bureau, agency or instrumentality having proper jurisdiction
as a result of any Claim brought, made or advanced of or against the Indemnitee; and

 

“Settlement” means an agreement to
compromise a Claim or an Action.

 

2.2                                     
Upon the Indemnitee becoming aware of any pending or threatened Claim or Action, the Indemnitee must provide written notice
of it to the Indemnitor as soon as is reasonably practicable.

 

2.3                                     
The Indemnitor shall have full power and authority to conduct such investigation of each Claim as is reasonably necessary
in the circumstances and shall pay all costs of such investigation.

 

2.4                                     
Subject to this subsection and §2.6(b), the Indemnitor shall defend, on behalf of the Indemnitee, any Claim or Action,
even if the basis for the Claim or Action is groundless, false or fraudulent. If the Indemnitor has reasonable grounds for believing
that any of the circumstances described in §1.2 apply to the Claim or Action, then the Indemnitor, upon giving the Indemnitee
written notice of its belief and the grounds therefore, may refuse to so defend the Claim or Action, but such refusal shall not
relieve the Indemnitor from any of its obligations of indemnity hereunder if it has determined that none of the provisions of §1.2
apply to the Claim or Action.

 

     

     -4-

    

2.5                                     
The Indemnitor shall consult with and pay reasonable heed to the Indemnitee concerning the appointment of any defence counsel
to be engaged by the Indemnitor in fulfillment of its obligation to defend a Claim or Action, pursuant to §2.4.

 

2.6                                     
With respect to a Claim or Action for which the Indemnitor is obliged to indemnify the Indemnitee hereunder:

 

(a)              
the Indemnitor may conduct negotiations towards a Settlement and, with the written consent of the Indemnitee (which the
Indemnitee agrees not to unreasonably withhold), the Indemnitor may make such Settlement as it (in its sole judgment) deems appropriate
or expedient in the circumstances, provided, however, that the Indemnitee shall not be required, as part of any proposed Settlement,
to admit liability or agree to indemnify the Indemnitor in respect of, or make contribution to, any compensation or other payment
for which provision is made by such Settlement; and

 

(b)              
if the Indemnitee fails to give his consent to the terms of a proposed Settlement which is otherwise acceptable to the Indemnitor
and the claimant, the Indemnitor may require the Indemnitee to negotiate or defend the Claim or Action independently of the Indemnitor
and in such event any amount recovered by such claimant in excess of the amount for which Settlement could have been made by the
Indemnitor, shall not be recoverable under this Indemnity, it being further agreed by the parties that the Indemnitor shall only
be responsible for legal fees and costs up to the time at which such Settlement could have been made.

 

2.7                                     
The Indemnitor shall have the right to negotiate a Settlement in respect of any Claim or Action which is founded upon any
of the acts specified in §1.2. In the event that the Indemnitor negotiates a Settlement in respect of any of the acts specified
in §1.2, the Indemnitee shall pay any compensation or other payment for which provision is made under the Settlement and shall
not seek indemnity or contribution from the Indemnitor, within 60 days of the Indemnitor making demand therefor, all fees, costs
and expenses (including legal fees and disbursements on a full indemnity basis) which result from the defence of the Claim or the
Action in respect of which the Settlement was made, including the cost of any investigation undertaken by the Indemnitor in connection
therewith, to the date the Settlement was made.

 

2.8                                     
The Indemnitor shall pay any Judgment which may be given against the Indemnitee unless any of the circumstances set out
in §1.2 applies to the Action in respect of which the Judgment is given or unless and to the extent the Indemnitee is otherwise
entitled to indemnity under the policy of insurance as contemplated by §1.2(d) in either case, the Indemnitee shall pay to
the Indemnitor, within 60 days of the Indemnitor making demand therefore, all, fees, costs and expenses (including legal fees and
disbursements on a full indemnity basis) which result from the defence and appeal of the Action, including the costs of any investigation
undertaken by the Indemnitor in connection with the Action.

 

2.9                                     
Upon the request of the Indemnitee and subject to the restrictions set out in the Business Corporations Act (British
Columbia), the Indemnitor shall pay the expenses of the Indemnitee incurred in relation to a Claim or an Action indemnified hereunder,
provided the Indemnitee hereby gives an undertaking to repay such expenses if it is finally determined that such payments are not
indemnifiable under this agreement or prohibited by the Business Corporations Act (British Columbia).

 

     

     -5-

    

		3.	GENERAL

 

3.1                                     
Nothing herein contained shall in any way affect the Indemnitee’s right to resign from his position as director or
officer of the Indemnitor at any time.

 

3.2                                     
The indemnity and release herein provided for shall survive the termination of the Indemnitee’s position as director
or officer of the Indemnitor, the termination of this Agreement, and shall continue in full force and effect thereafter.

 

3.3                                     
This Agreement supersedes all prior agreements between the parties with respect to its subject matter. Notwithstanding the
forgoing, nothing in this Agreement shall be deemed to diminish or otherwise restrict an Indemnified Party’s right to indemnification
under any provision of the Indemnitor’s articles or under applicable corporate law.

 

3.4                                     
Unless stated otherwise, all monies to be paid hereunder shall be paid within 10 days of becoming payable.

 

3.5                                     
The Indemnitee acknowledges that he has been advised to obtain independent legal advice with respect to entering into this
Agreement, that he has obtained such independent legal advice or has expressly waived such advice, and that he is entering into
this Agreement with full knowledge of the contents hereof, of his own free will and with full capacity and authority to do so.

 

3.6                                     
If any provision of this Agreement is determined to be invalid or unenforceable in whole or in part, such invalidity or
unenforceability shall attach only to such provision or part thereof and the remaining part of such provision and all other provisions
hereof shall continue in full force and effect. The parties hereto agree to negotiate in good faith to agree to a substitute provision
which shall be as close as possible to the intention of any invalid or unenforceable provision as may be valid or enforceable.
The invalidity or unenforceability of any provision in any particular jurisdiction shall not affect its validity or enforceability
in any other jurisdiction where it is valid or enforceable.

 

3.7                                     
Each party hereto agrees to do all such things and take all such actions as may be necessary or desirable to give full force
and effect to the matters contemplated by this Agreement.

 

3.8                                     
This Agreement shall enure to the benefit of and be binding upon the parties hereto and their respective heirs, executors,
administrators, legal representatives, successors and permitted assigns.

 

3.9                                     
Time shall be of the essence of this Agreement.

 

3.10                                 
This Agreement and the application or interpretation hereof shall be governed exclusively by its terms and by the laws of
the Province of British Columbia and the laws of Canada applicable therein and the parties hereto hereby irrevocably attorn to
the jurisdiction of the courts of the Province of British Columbia.

 

     

     -6-

    

IN WITNESS WHEREOF parties hereto have duly executed this Agreement as of the
date first written above.

 

ARBUTUS BIOPHARMA CORPORATION

 

Per: ___________________________________________

         Authorized Signatory

 

	
        Signed, Sealed and Delivered by __________ in the presence of:

         

        ___________________________________________

Witness (Signature)

         

        ___________________________________________

Name (please print)

         

        ___________________________________________

        Address

         

        ___________________________________________

City, Province

         

        ___________________________________________

Occupation

         
	)

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)

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    ___________________________________________

    Name of Indemnitee (please print)

 

    
 

     

    

Schedule to Exhibit 10.4

 

 

 

The following directors and executive officers
are parties to an Indemnity Agreement with the Company, each of which are substantially identical in all material respects to the
representative Indemnity Agreement filed herewith as Exhibit 10.4 except as to the name of the signatory and the effective date
of each signatory’s Indemnity Agreement. The name of each signatory to the Indemnity Agreement is set forth below. The actual
Indemnity Agreements are omitted pursuant to Instruction 2 to Item 601 of Regulation S-K.

 

 

 

 

 

 

	 
	 
	
        INDEMNITEE

          

         

        Mark J. Murray, PhD

         

	David C. Hastings
	Michael McElhaugh
	Gaston Picchio, PhD
	Frank Torti, MD
	James Meyers
	
        Myrtle Potter 

        Koert VandenEnden 

        William H. Collier

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