Item
5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements
of Certain Officers.
Marina
Biotech, Inc. (the “Company”) has entered into an employment agreement with R. Eric Teague (the “Employment
Agreement”) pursuant to which Mr. Teague shall serve as the Chief Financial Officer of the Company beginning on September
24, 2018 (the “Commencement Date”). In connection with the appointment of Mr. Teague as Chief Financial Officer, Amit
Shah, Chief Financial Officer of the Company since October 2017, resigned from such position, effective September 24, 2018.
Mr.
Teague, age 48, is an international finance and business executive who has amassed his knowledge over 20 years in the public accounting,
technology, private equity, manufacturing, and real estate industries, including c-suite leadership and finance roles. He has
successfully built and sold several companies. Mr. Teague served as the CFO and Board Member of ARCA Technologies, LLC from 2014
until March 2018. Prior to ARCA, Mr. Teague served as a consultant and managing partner for the Raleigh office of TechCXO. Mr.
Teague co-founded Wavelength and served as the CEO for over 6 years until it was acquired by Pavlov Media in 2010. After the acquisition,
Mr. Teague served as Chief Business Development Officer and Executive Vice President for Pavlov Media until 2011. Prior to that,
Mr. Teague founded TeagueRossCapital, LLC, an NC based private equity firm specializing in turnarounds, workouts, and distressed
asset investments. Mr. Teague initially built his career in SEC consulting, cross-border M&A, and audit roles of increasing
responsibility with PricewaterhouseCoopers, where he was a member of the Global Capital Markets Practice, the Transaction Services
Structuring Practice, and the Business Assurance Practice. Mr. Teague earned a Master in Business Administration degree from the
University of North Carolina at Chapel Hill and a B.A. in Accounting from North Carolina State University.
Mr.
Teague has no familial relationships with any executive officer or director of the Company. There have been no transactions in
which the Company has participated and in which Mr. Teague had a direct or indirect material interest that would be required to
be disclosed under Item 404(a) of Regulation S-K.
Mr.
Teague’s base salary under the Employment Agreement, which provides for a three year term, is initially $285,000 per year,
subject to review and adjustment by the Company from time to time.
Starting
in 2019, Mr. Teague shall be eligible for an annual discretionary cash bonus with a target of 35% of his base salary, subject
to his achievement of any applicable performance targets and goals. If the Company determines that is has achieved the 2018 Revenue
Target (as described below), then the Company shall pay to Mr. Teague an amount equal to $21,000 in 2019 within 30 days of the
Company’s public reporting of its 2018 final results. If the Company determines that it has achieved the 2018 Stock Price
Target (as described below), then the Company shall pay to Mr. Teague an amount equal to $21,000 in 2019.
Pursuant
to the Employment Agreement, the Company granted to Mr. Teague options to purchase up to 450,000 shares of the common stock of
the Company, which options shall vest as follows: (i) options to purchase up to 100,000 shares of common stock shall vest on the
grant date of the options; (ii) options to purchase up to 100,000 shares of common stock (for an aggregate of 300,000 shares of
common stock) shall vest on each of the first, second and third anniversary of the grant date; (iii) options to purchase up to
25,000 shares of common stock shall vest on the date that the Company determines that the “2018 Revenue Target” (as
described below) is achieved; and (iv) options to purchase up to 25,000 shares of common stock shall vest on the date that the
Company determines that the “2018 Stock Price Target” (as described below) is achieved.
The
2018 Revenue Target requires that the Company’s gross revenue (i.e., the total amount of sales recognized by Company from
June 18, 2018 through December 31, 2018 (such period, the “Prorated 2018 Fiscal Year”), less the sum of any returns,
rebates, chargebacks and distribution discounts) for the Prorated 2018 Fiscal Year equals or exceeds $1.2 million, as determined
by the Company’s auditors. The 2018 Stock Price Target requires that the daily volume weighted average price of the Company’s
common stock is not less than $2.00 per share for a 60 consecutive day period beginning on any day within the Prorated 2018 Fiscal
Year.
Mr.
Teague is eligible to participate in the Company’s other employee benefit plans as in effect from time to time on the same
basis as are generally made available to other senior executives of the Company.
In
the event that Mr. Moscato’s employment is terminated by the Company without “Cause” (as defined in the Employment
Agreement) or by Mr. Teague with “Good Reason” (as defined in the Employment Agreement), subject to Mr. Teague entering
into and not revoking a separation agreement in a form acceptable to the Company, Mr. Teague will be eligible to receive:
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accrued
benefits under the Employment Agreement through the termination date, including base salary and unreimbursed business expenses;
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severance
payments equal to his then-current base salary for the Severance Period (i.e., a period equal to (i) twelve (12) months or
(ii) in the event the Company terminates Mr. Teague employment for any reason other than Cause within six (6) months following
a Change of Control (as defined in the Employment Agreement), eighteen (18) months);
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vesting
of all options granted to Mr. Teague under the Employment Agreement that would have vested during the Severance Period had
he remained employed with the Company through the end of the Severance Period; and
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if
Mr. Teague timely elects and remains eligible for continued coverage under COBRA, the COBRA premiums necessary to continue
the health insurance coverage in effect for Mr. Teague and his covered dependents prior to the date of termination, until
the end of the Severance Period.
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In
the event that Mr. Teague’s employment is terminated for any reason other than by the Company without “Cause”
or by Mr. Teague with “Good Reason”, Mr. Teague (or his estate, if applicable) will be entitled to receive accrued
benefits under the Employment Agreement through the termination date, including base salary and unreimbursed business expenses.
Subject
to any termination, Mr. Teague will be subject to a confidentiality covenant, a 12-month non-competition covenant and a 24-month
non-solicitation covenant.
The
foregoing summary of the material terms of Mr. Teague’s employment agreement is qualified in its entirety by reference to
the complete text of the employment agreement, a copy of which is filed as Exhibit 10.1 hereto and is incorporated herein by reference.