ARCA BIOPHARMA, INC. 2009 REDUCTION IN FORCE SEVERANCE BENEFIT PLAN

Exhibit 10.4

ARCA BIOPHARMA, INC.

2009 REDUCTION IN FORCE

SEVERANCE BENEFIT PLAN

Adopted May 19, 2009

The ARCA Biopharma, Inc. 2009 Reduction in Force Severance Benefit Plan (the “ Plan ”) is established effective May 19, 2009. The purpose of the Plan is to provide for the payment of severance benefits to certain eligible employees of ARCA Biopharma, Inc. (the “ Company ”) who meet the eligibility criteria set forth in Section 2(a) below. This Plan supersedes any severance benefit plan, policy or practice, whether formal or informal, written or unwritten, previously announced or maintained by the Company. This Plan document also is the Summary Plan Description for the Plan.

(a)      General Rules. Subject to the requirements set forth in this Section, the Company will grant severance benefits under the Plan to Eligible Employees.

   (1)      Definition of “Eligible Employee.” For purposes of this Plan, an Eligible Employee is a full-time regular U.S. employee of the Company who is notified by the Company on May 20, 2009 in writing that (1) his or her employment is being terminated on May 20, 2009 by the Company without cause and other than as a result of the employee’s death or disability (such termination, a “ Qualifying Termination ”) and (2) as a result of such termination, he or she is eligible for participation in the Plan. The determination of whether an employee is an Eligible Employee shall be made by the Company, in its sole discretion, and such determination shall be binding and conclusive on all persons. For purposes of this Plan, full-time employees are those regular hire employees who are regularly scheduled to work at least thirty-two (32) hours per week. Neither temporary, leased or seasonal employees nor intern, agency temporary employees, independent contractors, consultants or agents under a written contract or purchase order, and persons so classified as such by the Company (whether or not such classification is upheld on governmental, judicial or other review) are eligible for severance benefits under the Plan.

  (2)       Each Eligible Employee shall receive a written Separation Agreement stating that the Eligible Employee’s Separation Date is May 20, 2009. The “ Separation Date ” is the effective date of the Eligible Employee’s termination of employment with the Company. As further described in Section 4 below, the Company may need to call the Eligible Employee following the Separation Date from time to time to answer questions to assist in transitioning matters after the Separation Date. In order to be eligible to receive any benefits under the Plan, an Eligible Employee must satisfactorily provide transition assistance in good faith, to the extent reasonably requested by the Company, after the Separation Date.

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   (3)       In order to be eligible to receive any benefits under the Plan, an Eligible Employee also must execute a general waiver and release within the time frame set forth therein and such release must become effective in accordance with its terms. In all cases the release must become effective not later than 60 days following the Separation Date. The Company, in its discretion, may modify the form of the required release to comply with applicable law and shall determine the form of the required release, which may be incorporated into a termination agreement or other agreement with the Eligible Employee.

(b)      Exceptions to Benefit Entitlement. An employee, including an employee who otherwise is an Eligible Employee, will not receive benefits under the Plan (or will receive reduced benefits under the Plan) in any of the following circumstances, as determined by the Company in its sole discretion:

  (1)       The Company terminates the employee’s employment prior to or after the Separation Date, or for a reason other than those reasons underlying a Qualifying Termination.

   (2)       The employee is covered by any other severance or separation pay plan, policy or practice of the Company or has executed an individually negotiated employment or separation contract or agreement with the Company relating to severance benefits that is in effect on his or her Separation Date, in which case such employee’s severance benefit, if any, shall be governed by the terms of such individually negotiated employment or separation contract or agreement.

   (3)       The employee’s employment is terminated as a result of his or her death or disability.

  (4)       The employee has not signed the Company’s standard form of confidential information and inventions assignment agreement (“ Proprietary Agreement ”) covering the employee’s period of employment with the Company (and with any predecessor) and/or does not confirm in writing that he or she is and shall remain subject to the terms of that agreement.

  (5)       The Company determines, in its sole discretion, that the employee’s receipt of severance benefits would not under the circumstances further the purposes of the Plan or would otherwise be inappropriate and not in the best interests of the Company.

(a)      Severance Benefits. Subject to the conditions set forth in Section 2, Eligible Employees will be eligible to receive severance benefits under the Plan in the amount provided in Appendix A.

(b)      Additional Benefits. Notwithstanding the foregoing, the Company may, in its sole discretion, (i) authorize benefits in addition to those benefits set forth in Section 3(a) to Eligible Employees; (ii) waive or modify, in respect to one or more employees or classes of employees, the eligibility requirements for receipt of benefits under this Plan and/or (iii) modify the method of calculating the amount of benefits to be received under the Plan. The provision of any such benefits to an Eligible Employee shall in no way obligate the Company to provide such benefits to any other Eligible Employee or to any other employee, even if similarly situated. An

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employee for whom any eligibility requirement has been waived or modified, or who is offered benefits under this Plan that are different than, or in addition to, those set forth in Section 3(a) will receive specific written notice that the Plan Administrator is exercising discretion in that regard. Receipt of benefits under this Plan pursuant to such exceptions may be subject to a covenant of confidentiality and non-disclosure.

(c)      Certain Reductions. The Company shall reduce an Eligible Employee’s severance benefits under this Plan by any other severance benefits, pay in lieu of notice, or other similar benefits payable to the Eligible Employee by the Company that become payable in connection with the Eligible Employee’s termination of employment pursuant to (i) any applicable legal requirement, including, without limitation, the Worker Adjustment and Retraining Notification Act, the California Plant Closing Act, or any other similar state law (collectively, “ WARN ”), (ii) a written employment or severance agreement with the Company, or (iii) any Company policy or practice providing for severance, termination pay, or otherwise allowing the Eligible Employee to remain on the payroll for a limited period of time after being given notice of the termination of the Eligible Employee’s employment, and the Plan Administrator shall so construe and implement the terms of the Plan. In the Company’s sole discretion, such reductions may be applied on a retroactive basis, with severance benefits previously paid being re-characterized as payments pursuant to the Company’s statutory obligation.

(d)      Code Section 409A. If the Company (or, if applicable, the successor entity thereto) determines that the payments and benefits provided under the Plan (the “ Plan Payments ”) constitute “deferred compensation” under Section 409A of the Internal Revenue Code of 1986, as amended (the “ Code ”) (Section 409A, together, with any state law of similar effect, “ Section 409A ”) and an Eligible Employee is, at the time of “separation from service” (as defined under Section 409A), a “specified employee” of the Company or any successor entity thereto, as such term is defined in Section 409A(a)(2)(B)(i) (a “ Specified Employee ”), then, solely to the extent necessary to avoid the incurrence of the adverse personal tax consequences under Section 409A, the timing of the Plan Payments shall be delayed as follows: on the earlier to occur of (i) the date that is six months and one day after the individual’s separation from service and (ii) the date of the Eligible Employee’s death (such earlier date, the “ Delayed Initial Payment Date ”), the Company (or the successor entity thereto, as applicable) shall (A) pay to the Eligible Employee a lump sum amount equal to the sum of the Plan Payments that the Eligible Employee would otherwise have received through the Delayed Initial Payment Date if the commencement of the payment of the Plan Payments had not been delayed pursuant to this Section 3(d) and (B) commence paying the balance of the Plan Payments in accordance with Appendix A. For the avoidance of doubt, it is intended that (1) each installment of the Plan Payments provided on Appendix A is a separate “payment” for purposes of Section 409A, (2) all Plan Payments provided on Appendix A satisfy, to the greatest extent possible, the exemptions from the application of Section 409A provided under of Treasury Regulation 1.409A-1(b)(4), 1.409A-1(b)(5) and 1.409A-1(b)(9)(iii), and (3) the Plan Payments consisting of COBRA premiums also satisfy, to the greatest extent possible, the exemptions from the application of Section 409A provided under Treasury Regulation 1.409A-1(b)(9)(v).

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(a)      Return of Company Property. An Eligible Employee will not be entitled to any severance under the Plan unless and until the Eligible Employee returns all Company Property. For this purpose, “ Company Property ” means all paper and electronic Company documents (and all copies thereof) created and/or received by the Eligible Employee during his or her period of employment with the Company and other Company property which the Eligible Employee had in his or her possession or control at any time, including, but not limited to, Company files, notes, lab notebooks, drawings, records, plans, forecasts, reports, studies, analyses, proposals, agreements, financial information, research and development information, sales and marketing information, operational and personnel information, specifications, code, software, databases, computer-recorded information, tangible property and equipment (including, but not limited to, leased vehicles, computers, computer equipment, software programs, facsimile machines, mobile telephones, servers), credit and calling cards, entry cards, identification badges and keys; and any materials of any kind which contain or embody any proprietary or confidential information of the Company (and all reproductions thereof in whole or in part). As a condition to receiving benefits under the Plan, Eligible Employees must not make or retain copies, reproductions or summaries of any such Company property. However, an Eligible Employee is not required to return his or her personal copies of documents evidencing the Eligible Employee’s hire, termination, compensation, benefits and stock options and any other documentation received as a shareholder of the Company.

(b)      Prepayment of Advanced Amounts. An Eligible Employee will not be entitled to any severance benefit under the Plan if the Eligible Employee previously received an advance(s) for business travel and entertainment expenses unless and until the Eligible Employee (i) properly completes and submits an expense reimbursement form(s) and supporting receipts to his or her manager no later than the Eligible Employee’s Separation Date and (ii) repays (via check payable to “ARCA Biopharma, Inc.”) any amounts advanced but not used and approved for reimbursement.

(c)      Transition of Work. An Eligible Employee will not be entitled to any severance benefit under the Plan unless and until the Eligible Employee (i) has satisfactorily transitioned his or her work and information concerning his or her work to the Company to the extent requested by the Company (including but not limited to completion of exit checklists and properly signed and witnessed lab notebooks) and (ii) has provided the Company with all logins, passwords, passcodes and similar information created by the Eligible Employee for documents, email and electronic files that the Eligible Employee created or used on Company systems.

All severance benefits under the Plan shall be paid as provided in Appendix A following the Eligible Employee’s satisfaction of all of the requirements set forth in this Plan. All payments under the Plan will be subject to applicable withholding for federal, state and local taxes. If an Eligible Employee is indebted to the Company at his or her Separation Date, the Company reserves the right to offset any severance payments under the Plan by the amount of such indebtedness. Additionally, if an Eligible Employee is subject to withholding for taxes related to any non-Plan benefits, including but not limited to any imputed income related to

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perquisites, the Company may offset any severance payments under the Plan by the amount of such withholding taxes. However, payments under the Plan will not be subject to any other deductions such as, but not limited to, 401(k) plan contributions and/or loan repayments or other employee benefit and benefit plan contributions.

In the event of an Eligible Employee’s reemployment by the Company or any other affiliate of the Company during the period of time in respect of which severance benefits pursuant to the Plan have been paid, the Company, in its sole and absolute discretion, may require such Eligible Employee to repay to the Company all or a portion of such severance benefits as a condition of reemployment.

(a)      Exclusive Discretion. The Plan Administrator is the Company. As Plan Administrator, the Company is the named fiduciary charged with the responsibility for administering the Plan. The Plan Administrator shall have the exclusive discretion and authority to establish rules, forms, and procedures for the administration of the Plan and to construe and interpret the Plan and to decide any and all questions of fact, interpretation, definition, computation or administration arising in connection with the operation of the Plan, including, but not limited to, the eligibility to participate in the Plan and amount of benefits paid under the Plan. The Plan Administrator may delegate any or all of its administrative duties to an officer of the Company and any such delegation shall convey with it the full discretionary authority of the Plan Administrator to carry out the delegated duties. The Company or the Plan Administrator shall indemnify and hold harmless any person to whom it delegated its responsibilities; provided , however , such person does not act with gross negligence or willful misconduct. The rules, interpretations, computations and other actions of the Plan Administrat