UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
SCHEDULE
14A
(Rule
14a-101)
INFORMATION
REQUIRED IN PROXY STATEMENT
SCHEDULE
14A INFORMATION
Proxy
Statement Pursuant to Section 14(a) of the
Securities
Exchange Act of 1934
Filed
by the Registrant [X] Filed by a Party other than the Registrant [ ]
Check
the appropriate box:
[X]
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Preliminary
Proxy Statement
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[ ]
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Confidential,
for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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[ ]
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Definitive
Proxy Statement
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[ ]
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Definitive
Additional Materials
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[ ]
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Soliciting
Material Pursuant to §240.14a-12
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Marina
Biotech, Inc.
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(Name
of Registrant as Specified in its Charter)
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(Name
of Person(s) Filing Proxy Statement if other than the Registrant)
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Payment of Filing Fee (Check in the appropriate box):
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[X]
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No fee required.
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[ ]
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
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of each class of securities to which transaction applies:
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Aggregate
number of securities to which transaction applies:
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Per
unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
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(4)
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maximum aggregate value of transaction:
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(5)
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Form,
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MARINA
BIOTECH, INC.
17870
Castleton Street, Suite 250
City
of Industry, California 91748
NOTICE
OF ANNUAL MEETING OF STOCKHOLDERS
To
Be Held [ ],
[ ] [ ], 2017
at 10:00 A.M. (Pacific Time)
TO
THE STOCKHOLDERS OF MARINA BIOTECH, INC.:
Notice
is hereby given that the Annual Meeting of Stockholders (the “Annual Meeting”) of Marina Biotech, Inc. will be held
on [________], [________] [__], 2017, at 10:00 A.M. Pacific Time, at 940 South Coast Drive, Suite 100, Costa Mesa, CA 92626, for
the purposes of considering and acting on the following items:
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1.
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To
elect five (5) persons to our Board of Directors, each to hold office until the 2018 annual meeting of stockholders and until
their respective successors shall have been duly elected or appointed and qualify;
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2.
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To
consider and vote on a proposal to amend our amended and restated certificate of incorporation to effect a reverse stock split,
at any time within two (2) years following the Annual Meeting, and in such ratio between a one-for-two and one-for-ten reverse
stock split, to be determined by our Board of Directors, to be in the best interest of Marina Biotech, Inc.;
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3.
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To
consider and vote on a proposal to amend our 2014 Long-Term Incentive Plan to increase the number of shares available for
issuance thereunder from 5,000,000 to 10,000,000 (without giving effect to Proposal 2);
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4.
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To
ratify the appointment of Squar Milner LLP as our independent registered public accounting firm for the fiscal year ending
December 31, 2017; and
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5.
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To
hold an advisory vote on executive compensation.
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The
enclosed Proxy Statement includes information relating to these proposals. Additional purposes of the Annual Meeting are to transact
such other business as may properly come before the Annual Meeting or any adjournment or postponement thereof.
Only
holders of record of our common stock, our series C convertible preferred stock and our series D convertible preferred stock as
of the close of business on March 23, 2017 are entitled to notice of and to vote at the Annual Meeting. The holders of at least
a majority of our outstanding shares of voting stock entitled to vote and present in person or by proxy are required for a quorum.
You may vote electronically through the Internet or by telephone. The instructions on your proxy card describe how to use these
convenient services. Of course, if you prefer, you can vote by mail by completing your proxy card and returning it to us in the
enclosed envelope.
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By
Order of the Board of Directors,
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/s/
Joseph W. Ramelli
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Joseph
W. Ramelli
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Chief
Executive Officer
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April
__, 2017
City
of Industry, CA
OUR
BOARD OF DIRECTORS APPRECIATES AND ENCOURAGES YOUR PARTICIPATION IN OUR ANNUAL MEETING. WHETHER OR NOT YOU PLAN TO ATTEND THE
ANNUAL MEETING, IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED. ACCORDINGLY, PLEASE AUTHORIZE A PROXY TO VOTE YOUR SHARES BY
INTERNET, TELEPHONE OR MAIL. IF YOU ATTEND THE ANNUAL MEETING, YOU MAY WITHDRAW YOUR PROXY, IF YOU WISH, AND VOTE IN PERSON. YOUR
PROXY IS REVOCABLE IN ACCORDANCE WITH THE PROCEDURES SET FORTH IN THIS PROXY STATEMENT.
MARINA
BIOTECH, INC.
17870
Castleton Street, Suite 250
City
of Industry, California 91748
PROXY
STATEMENT FOR
ANNUAL
MEETING OF STOCKHOLDERS
To
be held [________], [________] [__], 2017 at 10:00 A.M. (Pacific Time)
ANNUAL
MEETING AND PROXY SOLICITATION INFORMATION
General
This
Proxy Statement is furnished in connection with the solicitation of proxies by the board of directors (the “Board of Directors”)
of Marina Biotech, Inc., a Delaware corporation, for use at the Annual Meeting of Stockholders to be held on [________], [________]
[__], 2017, at 10:00 A.M. Pacific Time, at 940 South Coast Drive, Suite 100, Costa Mesa, CA 92626, and at any postponements or
adjournments thereof (the “Annual Meeting”). This Proxy Statement, the Notice of Annual Meeting of Stockholders and
the accompanying proxy card are being mailed to stockholders on or about April [__], 2017.
Important
Notice Regarding the Internet Availability of Proxy Materials for the Annual Meeting of Stockholders to Be Held on [_______] [__],
2017: The Proxy Statement and the Annual Report to Shareholders are available at
www.marinabio.com
. We encourage you to
review all of the important information contained in the proxy materials contained herein or accessed via our website before voting.
Recent
Change of Control
As
described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2016 that we filed with the Securities and
Exchange Commission on March 31, 2017, on November 15, 2016, we completed the merger (the “Merger”) of our wholly-owned
subsidiary, IThena Acquisition Corporation (“Merger Sub”), with and into IThenaPharma Inc. (“IThena” or
“IThenaPharma”). As a result of the Merger, Merger Sub merged with and into IThenaPharma, with IThenaPharma surviving
as a wholly-owned subsidiary of our company. Immediately following the completion of the Merger, the holders of IThena common
stock immediately prior to the completion of the Merger owned approximately 65% of the issued and outstanding shares of the common
stock of our company. IThenaPharma is deemed to be the accounting acquirer in the Merger, and thus the historical financial statements
of IThenaPharma will be treated as the historical financial statements of our company and will be reflected in our quarterly and
annual reports for periods ending after the effective time of the Merger.
Solicitation
and Voting Procedures
Solicitation.
The solicitation of proxies will be conducted by mail, and we will bear all attendant costs. These costs will include the
expense of preparing and mailing proxy materials for the Annual Meeting and reimbursements paid to brokerage firms and others
for their expenses incurred in forwarding solicitation materials regarding the Annual Meeting to beneficial owners of our common
stock, par value $0.006 per share. We may conduct further solicitation personally, telephonically, electronically or by facsimile
through our officers, directors and regular employees, none of whom would receive additional compensation for assisting with the
solicitation. We do not intend, but reserve the right, to use the services of a third party solicitation firm to assist us in
soliciting proxies.
Voting.
Stockholders of record may authorize the proxies named in the enclosed proxy card to vote their shares of common stock in
the following manner:
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by
mail, by marking the enclosed proxy card, signing and dating it, and returning it in the postage-paid envelope provided;
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by
telephone, by dialing the toll-free telephone number 1-800-690-6903 from within the United States or Canada and following
the instructions. Stockholders voting by telephone need not return the proxy card; and
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through
the Internet, by accessing the World Wide Website address
www.voteproxy.com
. Stockholders voting by the Internet need
not return the proxy card.
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Revocability
of Proxies.
Any proxy given pursuant to this solicitation may be revoked by the person giving it at any time before it is
exercised in the same manner in which it was given, or by delivering to Joseph W. Ramelli, Chief Executive Officer, Marina Biotech,
Inc., 17870 Castleton Street, Suite 250, City of Industry, California 91748, a written notice of revocation or a properly executed
proxy bearing a later date, or by attending the Annual Meeting and giving notice of your intention to vote in person.
Voting
Procedure.
The presence at the Annual Meeting of a majority of our outstanding shares of voting stock entitled to vote and
represented either in person or by proxy, will constitute a quorum for the transaction of business at the Annual Meeting. The
close of business on March 23, 2017 has been fixed as the record date (the “Record Date”) for determining the holders
of shares of our common stock, our series C convertible preferred stock and our series D convertible preferred stock entitled
to notice of and to vote at the Annual Meeting. Each share of common stock outstanding on the Record Date is entitled to one vote
on all matters. The holders of our series C convertible preferred stock and our series D convertible preferred stock shall be
entitled to vote their shares of preferred stock on all matters on an “as-converted” basis, subject to the beneficial
ownership limitations set forth in the certificate of designations for our series C convertible preferred stock and our series
D convertible preferred stock, as applicable. As of the Record Date, there were 97,187,131 shares of common stock outstanding.
Under Delaware law, stockholders will not have appraisal or similar rights in connection with any proposal set forth in this Proxy
Statement.
Stockholder
votes will be tabulated by the persons appointed by the Board of Directors to act as inspectors of election for the Annual Meeting.
Shares represented by a properly executed and delivered proxy will be voted at the Annual Meeting and, when instructions have
been given by the stockholder, will be voted in accordance with those instructions. If no instructions are given, the shares will
be voted FOR Proposal Nos. 1, 2, 3, 4 and 5.
Abstentions
and broker non-votes will each be counted as present for the purpose of determining whether a quorum is present at the Annual
Meeting. Abstentions will have no effect on the outcome of the election of directors (Proposal No. 1), but will be counted as
a vote AGAINST the proposal to effect a reverse split of our common stock (Proposal No. 3), AGAINST the proposal to amend our
2014 Long-Term Incentive Plan to increase the number of shares available for issuance thereunder from 5,000,000 to 10,000,000
(Proposal No. 4), AGAINST the ratification of Squar Milner LLP as our independent registered public accounting firm (Proposal
No. 4) and AGAINST the approval of the advisory vote to approve the compensation of our named executive officers (Proposal No.
5).
Broker
non-votes will have no effect on the outcome of the election of directors (Proposal No. 1), the approval of the increase in the
number of shares available for issuance under our 2014 Long-Term Incentive Plan (Proposal No. 3), the ratification of Squar Milner
LLP as our independent registered public accounting firm (Proposal No. 4) or the approval of the advisory vote to approve the
compensation of our named executive officers (Proposal No.5 ), but will be considered as a vote AGAINST the proposal to effect
a reverse stock split of our common stock.
A
broker non-vote occurs when a broker submits a proxy card with respect to shares of common stock held in a fiduciary capacity
(typically referred to as being held in “street name”), but declines to vote on a particular matter because the broker
has not received voting instructions from the beneficial owner. Under the rules of the New York Stock Exchange, a broker may have
the discretion to vote such shares on routine matters, but not on non-routine matters. Routine matters include the ratification
of independent registered public accounting firms, but do not include the election of directors, the adoption of employee benefit
plans and advisory votes regarding executive compensation. Thus, brokers will generally have the discretion to vote the proxy
for Proposal No. 4, but will not have discretion to cast a vote on Proposal Nos. 1, 2, 3 and 5.
On
each matter properly presented for consideration at the Annual Meeting, stockholders will be entitled to one vote for each share
of common stock held. Stockholders do not have cumulative voting rights in the election of directors.
Vote
Required
. For the election of directors (Proposal No. 1), the nominees who receive a plurality of votes from the shares present
in person or by proxy and entitled to vote at the Annual Meeting will be elected. For the approval of the proposed amendment to
our 2014 Long-Term Incentive Plan (Proposal No. 3), the ratification of our independent registered public accounting firm (Proposal
No. 4) and the approval of the advisory vote to approve the compensation of our named executive officers (Proposal No. 5), the
vote of a majority of the shares present in person or by proxy and entitled to vote on the matter at the Annual Meeting is required.
Because your vote with respect to Proposal No. 3 is advisory, it will not be binding upon our Board of Directors. For the approval
of the proposal to our certificate of incorporation to effect a reverse split of our common stock (Proposal No. 2), the affirmative
vote of a majority of the shares entitled to vote on the matter at the Annual Meeting is required.
If
any other matters are properly presented for consideration at the Annual Meeting, the persons named in the enclosed proxy will
have discretion to vote on those matters in accordance with their best judgment.
Householding
.
Some banks, brokers and other nominee record holders may be participating in the practice of “householding” proxy
statements and annual reports. This means that only one copy of this Proxy Statement or our annual report may have been sent to
multiple shareholders in your household. We will promptly deliver a separate copy of either document to you if you call or write
us at the following address or phone number: Marina Biotech, Inc., 17870 Castleton Street, Suite 250, City of Industry, California
91748, phone: (626) 964-5788, Attention: Joseph W. Ramelli, Chief Executive Officer. If you want to receive separate copies of
our annual report and Proxy Statement in the future, or if you are receiving multiple copies and would like to receive only one
copy for your household, you should contact your bank, broker or other nominee record holder, or you may contact us at the above
address and phone number.
PROPOSAL
NO. 1
ELECTION
OF DIRECTORS
General
Our
Amended and Restated Bylaws (the “Bylaws”) provide that the Board of Directors shall consist of not less than four
(4) members and not more than eleven (11) members, as fixed by the Board of Directors. Currently, the Board of Directors consists
of five (5) members.
At
the Annual Meeting, five (5) directors are to be elected by the holders of the common stock to serve until the 2018 annual meeting
of our stockholders and until such directors’ respective successors are elected or appointed and qualify or until any such
director’s earlier resignation or removal. The Board of Directors has nominated each of the persons listed below for election
to the Board of Directors at the Annual Meeting. Each of the director nominees is currently a member of our Board of Directors.
Name
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Age
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Position
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Director
Since
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Vuong
Trieu
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53
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Chairman
of the Board of Directors
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November
2016
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Philippe
P. Calais, Ph.D.
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58
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Director
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January
2017
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Stefan
C. Loren, Ph.D.
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53
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Lead
Independent Director
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August
2012
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Philip
C. Ranker
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57
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Director
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January
2014
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Donald
A. Williams
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58
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Director
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September
2014
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In
the event any nominee is unable or unwilling to serve as a director at the time of the Annual Meeting, the proxies may be voted
for the balance of those nominees named and for any substitute nominee designated by the current Board of Directors or the proxy
holders to fill such vacancy or for the balance of those nominees named without the nomination of a substitute, or the size of
the Board of Directors may be reduced in accordance with our Bylaws.
Nominees
The
following information is submitted concerning the nominees for election as directors based upon information received by us from
such persons:
Vuong
Trieu –
Dr. Trieu has served as a director of our company, and as the Chairman of our Board of Directors, since November
2016. Dr. Trieu currently serves as the Chairman of the Board and the Chief Executive Officer at Autotelic Inc. (since May 2014),
as the Chairman of the Board and the Chief Regulatory Officer at each of Glucotelic Inc. (since November 2016), Osteotelic Inc.
(since July 2016), Oncotelic Inc. (since October 2015) and Stocosil (since February 2015), and as the Chairman of the Board and
the Chief Operating Officer at LipoMedics Inc. (since August 2015). He previously served as Chairman of the Board and President
of IThenaPharma Inc. from August 2014 until that entity’s merger with Marina Biotech in November 2016, as the Chief Scientific
Officer of Sorrento Therapeutics, Inc. from September 2013 until May 2014, as the President and Chief Executive Officer at IgDraSol
Inc. from January 2012 until August 2013, as the President and Chief Executive Officer at Biomiga Diagnostics from 2011 until
August 2013, and as the Director of Biology / Pharmacology at Abraxis BioScience from November 2002 until July 2011. He also served
as a member of the Board of Directors of Sorrento Therapeutics, Inc. from September 2013 until August 2014. Dr. Trieu received
a Ph.D. in microbiology / molecular biology from the University of Oklahoma.
Philippe
P. Calais, Ph.D.
– Dr. Calais has served as a director of our company since January 2017. Dr. Calais has over 30 years
of biopharmaceutical and pharmaceutical industry experience in North America and Europe. Prior to becoming CEO of Isarna Therapeutics,
a developer of oligonucleotide therapeutics, he managed several biopharmaceutical companies in Canada and in Europe and headed
a large technology transfer organization, focusing on corporate strategic positioning, company deployment and sales optimization
strategies. His management expertise, combined with extensive experience with large pharma companies, such as ICI Pharmaceuticals
and Roche, covers the full scope of the drug chain — from discovery to clinical development, commercialization as well as
partnership and franchise strategic marketing for several therapeutic areas. He has successfully raised significant financing
internationally for private and publicly traded biotechs. A French citizen residing in Germany, he has a degree and doctorate
in pharmacy from France.
Stefan
C. Loren, Ph.D.
– Dr. Loren has served as a director of Marina Biotech since August 2012. Dr. Loren is currently the
founder at Loren Capital Strategy LLC, a health care-focused fund management firm. He was previously managing director at Westwicke
Partners, a healthcare-focused consulting firm, from 2008 through February 2014. Dr. Loren has over 20 years of experience as
a research and investment professional in the healthcare space, including roles at Perceptive Advisors, MTB Investment Advisors,
Legg Mason, and Abbott Laboratories. Prior to industry, Dr. Loren served as a researcher at The Scripps Research Institute working
with Nobel Laureate K. Barry Sharpless on novel synthetic routes to chiral drugs. His scientific work has been featured in Scientific
American, Time, Newsweek and Discover, as well as other periodicals and journals. Dr. Loren has served as a director of GenVec,
Inc. since September 2013 and as a director of Cellectar Biosciences, Inc. since June 2015, and within the past five years, he
has served on the board of directors of Orchid Cellmark Inc. and Polymedix, Inc. Dr. Loren received a doctorate degree in organic
chemistry from the University of California at Berkeley and a bachelor’s degree in chemistry from the University of California
San Diego.
Philip
C. Ranker
– Mr. Ranker has served as a director of Marina Biotech since January 2014. Currently, Mr. Ranker serves as
chief financial officer at Bioness, Inc. Previously he served as chief accounting officer of Marina Biotech from September 7,
2011 until September 30, 2011, and then served as interim chief financial officer and secretary of Marina Biotech from October
1, 2011 until December 31, 2013. Before that, Mr. Ranker served as chief financial officer of Suneva Medical, Inc. from 2009 to
2011, and as vice president of finance at Amylin Pharmaceuticals, Inc. from 2008 to 2009. Prior to Amylin, Mr. Ranker held various
positions with Nastech Pharmaceutical Company Inc. (the predecessor to Marina Biotech) from 2004 to 2008, including vice president
of finance from August 2004 until September 2005, and chief financial officer and secretary from September 2005 until January
2008. From September 2001 to August 2004, Mr. Ranker served as director of finance for ICOS Corporation. Prior to working at ICOS,
Mr. Ranker served in various positions in corporate accounting, managed care contracting and research and development, including
senior finance director, at Aventis Pharmaceutical and its predecessor companies during his nearly 15 years with the organization.
From February 2006 until 2010, Mr. Ranker also served as a member of the board of directors and as the chair of the audit committee
of ImaRx Therapeutics, Inc., which executed an initial public offering during his tenure. Prior to Aventis, Mr. Ranker was employed
by Peat Marwick (currently KPMG) as a Certified Public Accountant. Mr. Ranker holds a B.S. in accounting from the University of
Kansas.
Donald
A. Williams
– Mr. Williams has served as a director of Marina Biotech since September 2014. Mr. Williams is a 35-year
veteran of the public accounting industry, retiring in 2014. Mr. Williams spent 18 years as an Ernst & Young (EY) Partner
and the seven years as a partner with Grant Thornton (GT). Mr. Williams’ career focused on private and public companies
in the technology and life sciences sectors. During the last seven years at GT, he served as the National Leader of Grant Thornton’s
life sciences practice and the managing partner of the San Diego Office. He was the lead partner for both EY and GT on multiple
initial public offerings; secondary offerings; private and public debt financings; as well as numerous mergers and acquisitions.
From 2001 to 2014, Mr. Williams served on the board of directors and is past president and chairman of the San Diego Venture Group
and has served on the board of directors of various charitable organizations in the communities in which he has lived. Beginning
in 2015, Mr. Williams has served as a director of Proove Biosciences, Inc. and of Alphatec Holdings, Inc. (and its wholly-owned
operating subsidiary, Alphatec Spine, Inc.). Beginning in 2016, Mr. Williams has served as a director of Akari Therapeutics PLC,
and beginning in March 2017 Mr. Williams has served as a director of ImpediMed Limited. Mr. Williams is a graduate of Southern
Illinois University with a B.S. degree.
Vote
Required and Board of Directors’ Recommendation
Assuming
a quorum is present, the affirmative vote of a plurality of the votes cast at the Annual Meeting, either in person or by proxy,
is required for the election of a director. For purposes of the election of directors, abstentions and broker non-votes will have
no effect on the result of the vote.
THE
BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS
VOTE
“FOR” ALL OF THE NOMINEES NAMED IN PROPOSAL NO. 1.
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The
following table sets forth certain information regarding the ownership of our common stock as of March 23, 2017 (the “Determination
Date”) by: (i) each current director of our company and each director nominee; (ii) each of our Named Executive Officers;
(iii) all current executive officers and directors of our company as a group; and (iv) all those known by us to be beneficial
owners of more than five percent (5%) of our common stock.
Beneficial
ownership and percentage ownership are determined in accordance with the rules of the SEC. Under these rules, beneficial ownership
generally includes any shares as to which the individual or entity has sole or shared voting power or investment power and includes
any shares that an individual or entity has the right to acquire beneficial ownership of within 60 days of the Determination Date,
through the exercise of any option, warrant or similar right (such instruments being deemed to be “presently exercisable”).
In computing the number of shares beneficially owned by a person and the percentage ownership of that person, shares of our common
stock that could be issued upon the exercise of presently exercisable options and warrants are considered to be outstanding. These
shares, however, are not considered outstanding as of the Determination Date when computing the percentage ownership of each other
person.
To
our knowledge, except as indicated in the footnotes to the following table, and subject to state community property laws where
applicable, all beneficial owners named in the following table have sole voting and investment power with respect to all shares
shown as beneficially owned by them. Percentage of ownership is based on 97,187,131 shares of common stock outstanding as of the
Determination Date. Unless otherwise indicated, the business address of each person in the table below is c/o Marina Biotech,
Inc., 17870 Castleton Street, Suite 250, City of Industry, CA 91748. No shares identified below are subject to a pledge.
Name
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Number
of Shares
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Percent
of Shares Outstanding (%)
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Officers and Directors:
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J. Michael French, former
Director, President and CEO
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1,593,283
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(1)
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1.6
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%
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Stefan Loren, Ph.D., Director
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398,835
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(2)
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*
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Joseph W. Ramelli, CEO
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654,153
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(3)
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*
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Philip C. Ranker, Director
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1,116,553
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(4)
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1.1
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%
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Donald A. Williams, Director
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213,500
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(5)
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*
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Vuong Trieu, Chairman
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42,304,692
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(6)
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42.7
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%
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Philippe P. Calais, Ph.D., Director
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40,500
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(7)
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*
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Mihir Munsif, COO
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5,255,354
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(12)
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5.4
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%
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Larn Hwang, CSO
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0
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*
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All directors and executive officers
as a group (8 persons)
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49,983,587
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(8)
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50.0
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%
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Five Percent (5%)
Holders:
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Autotelic LLC
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23,123,558
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(9)
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23.8
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%
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Autotelic Inc.
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5,255,354
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(10)
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5.4
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%
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Pyng Soon
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5,255,354
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(11)
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5.4
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%
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Lynne Murphy
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|
|
5,255,354
|
(13)
|
|
|
5.4
|
%
|
|
|
|
|
|
*
Beneficial ownership of less than 1.0% is omitted.
|
|
|
|
(1)
|
Includes
presently exercisable options to purchase 771,000 shares of common stock. Pursuant to a settlement agreement, certain securities
beneficially owned by Mr. French are held in constructive trust by Mr. French for the benefit of Mr. French and his former
spouse.
|
|
(2)
|
Includes
presently exercisable options to purchase 213,500 shares of common stock and presently exercisable warrants to purchase 4,032
shares of common stock.
|
|
(3)
|
Includes
presently exercisable options to purchase 213,500 shares of common stock.
|
|
(4)
|
Includes
presently exercisable options to purchase 216,000 shares of common stock.
|
|
(5)
|
Consists
of presently exercisable options to purchase 213,500 shares of common stock.
|
|
(6)
|
Includes
presently exercisable options to purchase 40,500 shares of common stock. Also includes 23,123,558 shares held by Autotelic
LLC, of which entity Dr. Trieu serves as Chief Executive Officer, 5,255,354 shares held by Autotelic Inc., of which entity
Dr. Trieu serves as Chairman of the Board, 862,068 shares held by LipoMedics Inc., of which entity Dr. Trieu serves as Chairman
of the Board and Chief Operating Officer, and 1,928,571 shares of common stock issuable to Dr. Trieu upon the conversion of
a promissory note held by Dr. Trieu (at an assumed conversion price of $0.28).
|
|
(7)
|
Consists
of presently exercisable options to purchase 40,500 shares of common stock.
|
|
(8)
|
Includes
presently exercisable options to purchase 937,500 shares of common stock, presently exercisable warrants to purchase 4,032
shares of common stock, and 1,928,571 shares of common stock issuable to Dr. Trieu upon the conversion of a promissory note
held by Dr. Trieu (at an assumed conversion price of $0.28).
|
|
(9)
|
Information
based on a Schedule 13D filed with the Securities and Exchange Commission on November 23, 2017.
|
|
(10)
|
Information
based on a Schedule 13D filed with the Securities and Exchange Commission on November 23, 2017.
|
|
(11)
|
Information
based on a Schedule 13G filed with the Securities and Exchange Commission on November 23, 2017.
|
|
(12)
|
Information
based on a Schedule 13G filed with the Securities and Exchange Commission on November 23, 2017.
|
|
(13)
|
Information
based on a Schedule 13G filed with the Securities and Exchange Commission on November 22, 2017.
|
Biographical
Information Concerning Executive Officers
Biographical
information concerning our executive officers is set forth below.
Joseph
W. Ramelli
– Mr. Ramelli has served as our Chief Executive Officer since December 8, 2016. Previously he served as interim
Chief Executive Officer and Chairman of the Board of Directors of Marina Biotech from June 10, 2016 until December 8, 2016, and
as a director of Marina Biotech from August 2012 until December 8, 2016. Mr. Ramelli worked as a consultant for several investment
funds providing in-depth due diligence and investment recommendations. He has over 20 years of experience in the investment industry,
having worked as both an institutional equity trader and as an equity analyst at Eos Funds, Robert W. Duggan & Associates
and Seneca Capital Management. Mr. Ramelli graduated with honors from the University of California at Santa Barbara, with a B.A.
in business economics.
Larn
Hwang, Ph.D.
– Dr. Hwang has served as our Chief Scientific Officer since February 2017. Dr. Hwang, age 54, has served
as the Chief Executive Officer of Oncotelic, Inc. since October 2015 and as the Chief Scientific Officer of Autotelic Inc. since
October 2013. Dr. Hwang is a veteran in the drug development industry, with broad expertise in drug discovery and biomarker development,
as well as clinical and regulatory operations. Dr. Hwang was a founder of IgDraSol, Inc. (which merged with Sorrento Therapeutics
in 2013, where she later served as VP of Regulatory and Clinical Operations from September 2013 to May 2014) and served as its
Chief Operating Officer from April 2012 to August 2013, and she was a founder of Biomiga Diagnostics and served as its Chief Operating
Officer from 2011 to August 2013. Prior to that, she served as Head of Cell Biology at Abraxis BioScience from November 2005 to
June 2011 and as Senior Principal Scientist at Celgene Corporation from February 2011 to June 2011. Dr. Hwang has also held a
position with Johnson & Johnson. Dr. Hwang received a Ph.D. in Molecular Microbiology from The University of Texas Southwestern
Medical Center at Dallas.
Mihir
Munsif
– Mr. Munsif has served as our Chief Operating Officer since February 2017. Mr. Munsif, age 54, has served as
the Senior Vice President at Autotelic Inc. since November 2016, as the Senior Vice President of Portfolio Management of LipoMedics,
Inc. since June 2016 and as the Senior Vice President of Portfolio Management of Oncotelic, Inc. since October 2015. Previously
he served as the Chief Operating Officer of IThenaPharma Inc. from September 2014 until August 2016. Prior to that, he served
as Product Life Cycle Management and Supply Chain Consulting at Accenture from March 2013 until September 2014 and as Product
Life Cycle Management and Supply Chain Management Operations at Herbalife from April 2009 until March 2013. Mr. Munsif received
a M.S. in Industrial Engineering from the University of Oklahoma and a B.S. in Chemical Engineering from Manipal Institute of
Technology.
Director’s
Qualifications
In
selecting a particular candidate to serve on our Board of Directors, we consider the needs of our company based on particular
experiences, qualifications, attributes and skills that we believe would be advantageous for our Board members to have and would
qualify such candidate to serve on our Board given our business profile and the environment in which we operate. The table below
sets forth such experiences, qualifications, attributes and skills, and identifies the ones that each director and director nominee
possesses.
Attributes
|
|
Dr.
Loren
|
|
Mr.
Ranker
|
|
Mr.
Williams
|
|
Dr.
Trieu
|
|
Dr.
Calais
|
Financial Experience
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
Public Board Experience
|
|
X
|
|
X
|
|
X
|
|
X
|
|
|
Industry Experience
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
Scientific Experience
|
|
X
|
|
|
|
|
|
X
|
|
X
|
Commercial Experience
|
|
|
|
X
|
|
X
|
|
X
|
|
X
|
Corporate Governance Experience
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
Capital Markets Experience
|
|
X
|
|
X
|
|
X
|
|
X
|
|
|
Management Experience
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
Arrangements
Regarding Director Nominations
Pursuant
to the Merger Agreement, and in connection with the Merger, Dr. Trieu was appointed to our Board, to serve until our 2017 annual
meeting of stockholders or until his earlier death, resignation or removal. At such time, Dr. Trieu was also appointed to serve
as Chairman of the Board.
Dr.
Calais was identified to serve as a member of our Board by Dr. Trieu, in his capacity as the representative of the former stockholders
of IThenaPharma, pursuant to that certain Agreement and Plan of Merger among Marina Biotech, IThenaPharma, Merger Sub and Dr.
Trieu. Dr. Trieu served as the Chief Executive Officer of IThenaPharma immediately prior to the closing of the Merger.
Family
Relationships
There
are no familial relationships between any of our executive officers and directors. However, Falguni Trieu, our Director of Business
Development, is the spouse of Vuong Trieu, the Chairman of our Board of Directors.
Director
or Officer Involvement in Certain Legal Proceedings
Our
directors and executive officers were not involved in any legal proceedings as described in Item 401(f) of Regulation S-K in the
past ten years.
Independence
of the Board of Directors
The
Board of Directors utilizes NASDAQ’s standards for determining the independence of its members. In applying these standards,
the Board considers commercial, industrial, banking, consulting, legal, accounting, charitable and familial relationships, among
others, in assessing the independence of directors, and must disclose any basis for determining that a relationship is not material.
The Board has determined that four (4) of its current members, namely Philippe Calais, Ph.D., Stephen Loren, Ph.D., Philip C.
Ranker and Donald A. Williams, are independent directors within the meaning of the NASDAQ independence standards. In making these
independence determinations, the Board did not exclude from consideration as immaterial any relationship potentially compromising
the independence of any of the above directors.
Meetings
of the Board of Directors
The
Board of Directors held twenty-four meetings during 2016. During 2016, all directors attended more than 75% of the aggregate number
of meetings of the Board of Directors that were held during the time that they served as members of the Board of Directors. We
do not have a formal policy regarding attendance by members of the Board of Directors at the annual meeting of stockholders, but
we strongly encourage all members of the Board of Directors to attend our annual meetings and expect such attendance except in
the event of extraordinary circumstances. All of our directors attended our annual meeting of stockholders for the 2015 fiscal
year.
Committees
of the Board of Directors
The
Board of Directors has established and currently maintains the following two standing committees: the Audit Committee and the
Compensation Committee. The Board of Directors has adopted written charters for each of these committees, which we make available
free of charge on or through our Internet website, along with other items related to corporate governance matters, including our
Code of Business Conduct and Ethics applicable to all employees, officers and directors. We maintain our Internet website at www.marinabio.com.
You can access our committee charters and code of conduct on our website by first clicking “About Marina Biotech”
and then “Corporate Governance.”
We
intend to disclose on our Internet website any amendments to or waivers from our Code of Business Conduct and Ethics, as well
as any amendments to the charters of any of our standing committees. Any stockholder also may obtain copies of these documents,
free of charge, by sending a request in writing to: Marina Biotech, Inc., 17870 Castleton Street, Suite 250, City of Industry,
CA 91748.
Currently,
the Audit Committee consists of Mr. Williams (Chair), Mr. Ranker and Dr. Calais, and the Compensation Committee consists of Dr.
Loren (Chair), Mr. Williams and Mr. Ranker. During the 2016 fiscal year, the Audit Committee held four meetings, and the Compensation
Committee did not hold any meetings. All members of each standing committee during 2016 attended at least 75% of the meetings
that were held during the periods when they served as members of such committee.
Audit
Committee
. Among other functions, the Audit Committee authorizes and approves the engagement of the independent registered
public accounting firm, reviews the results and scope of the audit and other services provided by the independent registered public
accounting firm, reviews our financial statements, reviews and evaluates our internal control functions, approves or establishes
pre-approval policies and procedures for all professional audit and permissible non-audit services provided by the independent
registered public accounting firm and reviews and approves any proposed related party transactions. The Board of Directors has
determined that each of the current members of the Audit Committee is an independent director within the meaning of the NASDAQ
independence standards and Rule 10A-3 promulgated by the SEC under the Securities Exchange Act of 1934, as amended (the “Exchange
Act”). In addition, the Board of Directors has determined that each of the current members of the Audit Committee qualifies
as an Audit Committee Financial Expert under applicable SEC Rules and satisfies the NASDAQ standards of financial literacy and
financial or accounting expertise or experience.
Compensation
Committee.
The Compensation Committee’s functions include reviewing and approving the compensation and benefits for
our executive officers, administering our equity compensation plans and making recommendations to the Board of Directors regarding
these matters. Neither the Compensation Committee nor the Board of Directors retained any consultants to assist in the review
and approval of the compensation and benefits for the executive officers of our company during 2016. The Board of Directors has
determined that each current member of the Compensation Committee is an independent director within the meaning of the NASDAQ
independence standards.
Selection
of Board Candidates
In
selecting candidates for the Board of Directors, the Board begins by determining whether the incumbent directors whose terms expire
at the annual meeting of stockholders desire and are qualified to continue their service on the Board of Directors. If there are
positions on the Board of Directors for which the Board will not be re-nominating an incumbent director, or if there is a vacancy
on the Board of Directors, the Board will solicit recommendations for nominees from persons whom the Board believes are likely
to be familiar with qualified candidates, including members of our Board of Directors and our senior management. The Board may
also engage a search firm to assist in the identification of qualified candidates. The Board will review and evaluate those candidates
whom it believes merit serious consideration, taking into account all available information concerning the candidate, the existing
composition and mix of talent and expertise on the Board of Directors and other factors that it deems relevant. In conducting
its review and evaluation, the committee may solicit the views of management and other members of the Board of Directors, and
may conduct interviews of proposed candidates.
The
Board generally requires that all candidates for the Board of Directors be of the highest personal and professional integrity
and have demonstrated exceptional ability and judgment. The Board will consider whether such candidate will be effective, in conjunction
with the other members of the Board of Directors, in collectively serving the long-term interests of our stockholders. In addition,
the Board requires that all candidates have no interests that materially conflict with our interests and those of our stockholders,
have meaningful management, advisory or policy making experience, have a general appreciation of the major business issues facing
us and have adequate time to devote to service on the Board of Directors.
The
Board will consider stockholder recommendations for nominees to fill director positions, provided that the Board will not entertain
stockholder nominations from stockholders who do not meet the eligibility criteria for submission of stockholder proposals under
Rule 14a-8 of Regulation 14A under the Exchange Act. Stockholders may submit written recommendations for nominees to the Board
of Directors, together with appropriate biographical information and qualifications of such nominees as required by our Bylaws,
to our Corporate Secretary following the same procedures as described in “Stockholder Communications” in this Proxy
Statement. In order for the Board to consider a nominee for directorship submitted by a stockholder, such recommendation must
be received by the Corporate Secretary by the time period set forth in our most recent proxy statement for the submission of stockholder
proposals under Rule 14a-8 of Regulation 14A under the Exchange Act. The Corporate Secretary shall then deliver any such communications
to the Chairman of the Board. The Board will evaluate stockholder recommendations for candidates for the Board of Directors using
the same criteria as for other candidates, except that the Board may consider, as one of the factors in its evaluation of stockholder
recommended candidates, the size and duration of the interest of the recommending stockholder or stockholder group in our equity.
Board
Leadership Structure and Role in Risk Oversight
Although
we have not adopted a formal policy on whether the Chairman of the Board and Chief Executive Officer positions should be separate
or combined, given our company’s recent operational history and the recent Merger with IThenaPharma, we have determined
that it is in the best interests of our company and its stockholders that these roles be separate. Mr. Ramelli, who has served
as an executive officer of Marina Biotech since June 2016, and who served as a director of Marina Biotech from August 2012 until
December 2016, currently serves as our Chief Executive Officer. Given his long involvement with Marina Biotech as a director and
as an executive officer, Mr. Ramelli is intimately familiar with the business operations and strategic direction of Marina Biotech,
including with respect to the period prior to the Merger. Dr. Trieu, who previously served as president of IThenaPharma, and who
(directly or indirectly) controlled a majority of the outstanding shares of the common stock of IThenaPharma, serves as the Chairman
of our Board of Directors. Through his positions with IThenaPharma, Dr. Trieu is intimately familiar with the business operations
and strategic direction of IThenaPharma.
At
the same time, we also believe it is important that our independent directors have a strong voice in the leadership of our company.
As a result, we believe it is beneficial to our company and its stockholders that one of the independent directors of our Board
serve in the capacity of Lead Independent Director. Dr. Loren currently serves as Lead Independent Director. We believe that the
use of a Lead Independent Director is beneficial because the Lead Independent Director can provide the Chairman and the CEO with
guidance and feedback on their performance in those roles, as well as provide a more effective channel for the independent members
of the Board to express their views on management. To further strengthen the voice of our independent directors, we provide that
such directors meet on a regular basis, and we have provided that all of the members of the Audit Committee and the Compensation
Committee are independent.
The
Board of Directors continually evaluates our leadership structure and could in the future decide to combine the Chairman and CEO
positions, or to eliminate the Lead Independent Director position, if it believes that doing so would serve the best interests
of our company.
Our
Board of Directors and the Audit Committee thereof is responsible for overseeing the risk management processes on behalf of our
company. The Board and, to the extent applicable, the Audit Committee, receive and review periodic reports from management, auditors,
legal counsel and others, as considered appropriate regarding our company’s assessment of risks. Where applicable, the Audit
Committee reports regularly to the full Board of Directors with respect to risk management processes. The Audit Committee and
the full Board of Directors focus on the most significant risks facing our company and our company’s general risk management
strategy, and also ensure that risks undertaken by our company are consistent with the Board’s appetite for risk. While
the Board oversees the risk management of our company, management is responsible for day-to-day risk management processes. We
believe this division of responsibilities is the most effective approach for addressing the risks facing our company and that
our Board leadership structure supports this approach.
Stockholder
Communications
All
stockholder communications must: (i) be addressed to our Chief Executive Officer at our address; (ii) be in writing either in
print or electronic format; (iii) be signed by the stockholder sending the communication; (iv) indicate whether the communication
is intended for the entire Board of Directors, a committee thereof, or the independent directors; (v) if the communication relates
to a stockholder proposal or director nominee, identify the number of shares held by the stockholder, the length of time such
shares have been held, and the stockholder’s intention to hold or dispose of such shares, provided that we will not entertain
shareholder proposals or shareholder nominations from shareholders who do not meet the eligibility and procedural criteria for
submission of shareholder proposals under Commission Rule 14a-8 of Regulation 14A under the Exchange Act; and (vi) if the communication
relates to a director nominee being recommended by the stockholder, must include appropriate biographical information of the candidate
as is required by our Bylaws.
Upon
receipt of a stockholder communication that is compliant with the requirements identified above, the Chief Executive Officer shall
promptly deliver such communication to the appropriate member(s) of the Board of Directors or committee member(s) identified by
the stockholder as the intended recipient of such communication by forwarding the communication to either the chairman of the
Board of Directors with a copy to the CEO, the chairman of the applicable committee, or to each of the independent directors,
as the case may be.
The
Chief Executive Officer may, in his or her sole discretion and acting in good faith, provide copies of any such stockholder communication
to any one or more of our directors and executive officers, except that in processing any stockholder communication addressed
to the independent directors, the Chief Executive Officer may not copy any member of management in forwarding such communications.
In addition, the Chief Executive Officer may, in his or her sole discretion and acting in good faith, not forward certain items
if they are deemed of a commercial or frivolous nature or otherwise inappropriate for consideration by the intended recipient
and any such correspondence may be forwarded elsewhere in our company for review and possible response.
CERTAIN
RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
Approval
for Related Party Transactions
It
is our practice and policy to comply with all applicable laws, rules and regulations regarding related-person transactions. Our
Code of Business Conduct and Ethics requires that all employees, including officers and directors, disclose to the CEO the nature
of any company business that is conducted with any related party of such employee, officer or director (including any immediate
family member of such employee, officer or director, and any entity owned or controlled by such persons). If the transaction involves
an officer or director of our company, the CEO must bring the transaction to the attention of the Audit Committee or, in the absence
of an Audit Committee the full Board, which must review and approve the transaction in writing in advance. In considering such
transactions, the Audit Committee (or the full Board, as applicable) takes into account the relevant available facts and circumstances.
Related
Party Transactions
Transactions
with Vuong Trieu, Ph.D.
We
have entered into the following transactions with Dr. Trieu, the Chairman of our Board of Directors, and/or entities that are
controlled by him, that require disclosure under Item 404(a) of Regulation S-K promulgated under the Exchange Act: (A) Marina
and Dr. Trieu are parties to the Line Letter dated November 15, 2016 pursuant to which Dr. Trieu offered to us an unsecured line
of credit in an amount not to exceed $540,000 to be used for current operating expenses; (B) Dr. Trieu is the Chief Executive
Officer of Autotelic LLC, with which entity Marina entered into a License Agreement dated November 15, 2016; (C) Dr. Trieu is
the Chairman of the Board of Directors of Autotelic Inc., with which entity Marina entered into a Master Services Agreement dated
November 15, 2016, and which entity offered to us an unsecured line of credit in an amount not to exceed $500,000 in April 2017;
and (D) Dr. Trieu is the Chairman of the Board of Directors and Chief Operating Officer of LipoMedics Inc. (“LipoMedics”),
with which entity we entered into a License Agreement and a Stock Purchase Agreement, each dated February 6, 2017. Each of the
foregoing agreements is described immediately below. Immediately following the completion of the Merger, Autotelic LLC owned approximately
25.8% of the issued and outstanding shares of our common stock and Autotelic Inc. owned approximately 5.9% of the issued and outstanding
shares of our common stock.
Line
Letter with Dr. Trieu
On
November 15, 2016, Marina entered into a Line Letter with Dr. Trieu for an unsecured line of credit in an amount not to exceed
$540,000, to be used for current operating expenses. Dr. Trieu will consider requests for advances under the Line Letter until
April 30, 2017. Dr. Trieu shall have the right at any time for any reason in his sole and absolute discretion to terminate the
line of credit available under the Line Letter or to reduce the maximum amount available thereunder without notice; provided,
that Dr. Trieu agreed that he shall not demand the repayment of any advances that are made under the Line Letter prior to the
earlier of: (i) May 15, 2017; and (ii) the date on which (x) we make a general assignment for the benefit of our creditors, (y)
we apply for or consents to the appointment of a receiver, a custodian, a trustee or liquidator of all or a substantial part of
our assets or (z) we cease operations. Advances made under the Line Letter shall bear interest at the rate of five percent (5%)
per annum, shall be evidenced by the Demand Promissory Note issued to Dr. Trieu, and shall be due and payable upon demand by Dr.
Trieu.
Dr.
Trieu shall have the right, exercisable by delivery of written notice thereof (the “Election Notice”), to either:
(i) receive repayment for the entire unpaid principal amount advanced under the Line Letter and the accrued and unpaid interest
thereon on the date of the delivery of the Election Notice (the “Outstanding Balance”) or (ii) convert the Outstanding
Balance into such number of shares of our common stock as is equal to the quotient obtained by dividing (x) the Outstanding Balance
by (y) $0.10 (such price, the “Conversion Price”, and the number of shares of common stock to be issued pursuant to
the foregoing formula, the “Conversion Shares”); provided, that in no event shall the Conversion Price be lower than
the lower of (x) $0.28 per share or (y) the lowest exercise price of any securities that have been issued by us in a capital raising
transaction (and that would otherwise reduce the exercise price of any other outstanding warrants issued by us) during the period
between November 15, 2016 and the date of the delivery of the Election Notice.
Autotelic
LLC License Agreement
On
November 15, 2016, Marina entered into a License Agreement with Autotelic LLC pursuant to which (A) Marina licensed to Autotelic
LLC certain patent rights, data and know-how relating to FAP and nasal insulin, for human therapeutics other than for oncology-related
therapies and indications, and (B) Autotelic LLC licensed to Marina certain patent rights, data and know-how relating to IT-102
and IT-103, in connection with individualized therapy for pain using a non-steroidal anti-inflammatory drug and an anti-hypertensive
without inducing intolerable edema, and treatment of certain aspects of proliferative disease, but not including rights to IT-102/IT-103
for TDM guided dosing for all indications using an Autotelic Inc. TDM Device. Marina also granted a right of first refusal to
Autotelic LLC with respect to any license by Marina of the rights licensed by or to Marina under the License Agreement in any
cancer indication outside of gastrointestinal cancers.
The
License Agreement shall immediately terminate, all rights granted by a licensor under the License Agreement shall immediately
revert forthwith to the applicable licensor, all benefits which have accrued under the License Agreement shall automatically be
transferred to the applicable licensor, and all rights, title and interest in the licensed intellectual property shall immediately
revert back to the applicable licensor if: (i) the applicable licensee makes a general assignment for the benefit of its creditors
prior to the two (2) year anniversary of the date of the License Agreement; (ii) the applicable licensee applies for or consents
to the appointment of a receiver, a custodian, a trustee or liquidator of all or a substantial part of its intellectual property
prior to the two (2) year anniversary of the date of the License Agreement; (iii) prior to the two (2) year anniversary of the
date of the License Agreement, and without the consent of the applicable licensor, the applicable licensee effects a Change of
Control Transaction (as defined in the License Agreement); (iv) the applicable licensee ceases operations; or (v) the applicable
licensee fails to take any material steps, as reasonably determined by the applicable licensor, to develop the licensed intellectual
property prior to the one (1) year anniversary of the date of the License Agreement (each of the foregoing items (i) through (v),
a “Termination Event”). Upon the occurrence of any Termination Event, the applicable licensee shall immediately discontinue
all use of the licensed intellectual property.
Master
Services Agreement
On
November 15, 2016, Marina entered into a Master Services Agreement with Autotelic Inc. pursuant to which Autotelic Inc. agreed
to provide certain business functions and services from time to time during regular business hours at Marina’s request (the
“Master Services Agreement”). The Master Services Agreement has a term of ten years, though either party can terminate
it by giving to the other party ninety (90) days’ prior written notice of such termination (provided that the final day
of the term shall be on the last day of the calendar month in which the noticed termination date falls). The resources available
to us through Autotelic Inc. include, without limitation, regulatory, clinical, preclinical, manufacturing, formulation, legal,
accounting and information technology.
As
partial consideration for the services to be performed by Autotelic Inc. under the Master Services Agreement, during the period
prior to the date on which we have completed an equity offering of either common or preferred stock in which the gross proceeds
therefrom is no less than $10 million, we shall issue to Autotelic Inc. warrants to purchase shares of our common stock, with
the number of shares of common stock for which such warrants are exercisable, and the exercise price for such warrants, being
based on the closing price of our common stock; provided, that in no event shall such price be lower than the lower of (x) $0.28
per share or (y) the lowest exercise price of any warrants that have been issued by us in a capital raising transaction (and that
would otherwise reduce the exercise price of any other outstanding warrants issued by us) during the period beginning on November
15, 2016 and ending on the date of the issuance of such warrants.
Line
Letter with Autotelic Inc.
On
April 4, 2017, we entered into a Line Letter with Autotelic Inc. for an unsecured line of credit in an amount not to exceed $500,000,
to be used for current operating expenses. Autotelic Inc. will consider requests for advances under the Line Letter until September
1, 2017. Autotelic Inc. shall have the right at any time for any reason in its sole and absolute discretion to terminate the line
of credit available under the Line Letter or to reduce the maximum amount available thereunder without notice; provided, that
Autotelic Inc. agreed that it shall not demand the repayment of any advances that are made under the Line Letter prior to the
earlier of: (i) October 4, 2017; and (ii) the date on which (x) we make a general assignment for the benefit of our creditors,
(y) we apply for or consents to the appointment of a receiver, a custodian, a trustee or liquidator of all or a substantial part
of our assets or (z) we cease operations. Advances made under the Line Letter shall bear interest at the rate of five percent
(5%) per annum, shall be evidenced by the Demand Promissory Note issued to Autotelic Inc., and shall be due and payable upon demand
by Autotelic Inc.
Arrangements
with LipoMedics
On
February 6, 2017, we entered into a License Agreement with LipoMedics pursuant to which, among other things, we provided to LipoMedics
a license to our SMARTICLES platform for the delivery of nanoparticles including small molecules, peptides, proteins and biologics.
This represents the first time that our SMARTICLES technologies have been licensed in connection with nanoparticles delivering
small molecules, peptides, proteins and biologics. On the same date, we also entered into a Stock Purchase Agreement with LipoMedics
pursuant to which we issued to LipoMedics an aggregate of 862,068 shares of our common stock for a total purchase price of $250,000.
Under
the terms of the License Agreement, we could receive up to $90 million in success-based milestones. In addition, if LipoMedics
determines to pursue further development and commercialization of products under the License Agreement, LipoMedics agreed, in
connection therewith, to purchase shares of our common stock for an aggregate purchase price of $500,000, with the purchase price
for each share of common stock being the greater of $0.29 or the volume weighted average price of our common stock for the thirty
(30) trading days immediately preceding the date on which LipoMedics notifies us that it intends to pursue further development
or commercialization of a licensed product. LipoMedics may terminate the License Agreement by giving thirty (30) days’ prior
written notice to us.
Transactions
with Larn Hwang, Ph.D.
Dr.
Hwang, who was appointed to serve as our Chief Scientific Officer in February 2017, also serves as the Chief Scientific Officer
of Autotelic Inc., which entity owns 5,255,354 shares of our common stock, which it acquired pursuant to the Merger Agreement.
Further, Marina and Autotelic Inc. are parties to the Master Services Agreement dated November 15, 2016 that was entered into
in connection with the Merger Agreement, and on April 4, 2017 we entered into a Line Letter with Autotelic Inc. for an unsecured
line of credit in an amount not to exceed $500,000, each of which is described above.
Transactions
with Mihir Munsif
Each
of Mr. Munsif, who was appointed to serve as our Chief Operating Officer in February 2017, and Autotelic Inc., of which entity
Mr. Munsif serves as Senior Vice President, owns 5,255,354 shares of our common stock, which shares were acquired pursuant to
the Merger Agreement. In addition, Marina and Autotelic Inc. are parties to the Master Services Agreement dated November 15, 2016
that was entered into in connection with the Merger Agreement, , and on April 4, 2017 we entered into a Line Letter with Autotelic
Inc. for an unsecured line of credit in an amount not to exceed $500,000, each of which is described above. In addition, on February
6, 2017, we entered into a License Agreement and a Stock Purchase Agreement with LipoMedics, of which entity Mr. Munsif serves
as Senior Vice President of Portfolio Management, which agreements are described above.
Related
Party Transactions Regarding IThenaPharma
IThenaPharma
had entered into a Master Services Agreement (“MSA”) with a related party, Autotelic Inc., effective January 1, 2015.
Prior to the Merger, Autotelic Inc. owned less than 10% of IThenaPharma. Pursuant to the MSA, Autotelic Inc. provided business
functions and services to IThenaPharma, and in consideration for such functions and services, Autotelic Inc. charged IThenaPharma
for expenses paid on its behalf. The MSA includes personnel costs allocated based on amount of time incurred and other services
such as consultant fees, clinical studies, conferences and other operating expenses incurred on behalf of IThenaPharma.
As
per the MSA, IThenaPharma paid Autotelic Inc. cash in an amount equal to the actual labor cost, plus warrants for shares of IThenaPharma’s
common stock with a strike price equal to the fair market value of IThenaPharma’s common stock at the time said warrants
are issued (calculated based on the Black-Scholes model). IThenaPharma also paid Autotelic Inc. for the services provided by third
party contractors plus 20% mark up.
In
accordance with the MSA, Autotelic Inc. billed IThenaPharma for personnel and service expenses Autotelic Inc. incurred on behalf
of IThenaPharma. Personnel costs charged by Autotelic Inc. were $166,550 and $236,594 for the years ended on December 31, 2016
and 2015, respectively.
For
the years ended December 31, 2016 and 2015, Autotelic Inc. billed IThenaPharma a total of $344,563 and $332,866, respectively.
Of the total expenses billed by Autotelic Inc., $232,610 and $278,716 was paid in cash, $83,166 and $59,525 was recorded as due
to related party, and IThenaPharma issued warrants for the remaining amount due of $47,791 and $36,470, respectively.
In
December 2015, IThenaPharma issued 47,374, 40,132 and 30,214 warrants to Autotelic Inc. for shares of IThenaPharma common stock
with a strike price at $2.76, which represented a 100% markup of the personnel service from January 1 to March 31, 2015, April
1 to June 30, 2015, and July 1 to September 30, 2015, respectively. In February 2016, IThenaPharma issued 21,453 warrants to Autotelic
Inc. for shares of IThenaPharma common stock with a strike price at $2.76, which represented a 100% markup of the personnel service
from October 1 to December 31, 2015. As noted below, the warrants were cancelled as part of the acquisition by Autotelic Inc.
from IThenaPharma of the technology asset (IT-101).
In
July 2016, IThenaPharma issued convertible promissory notes with an aggregate principal balance of $50,000 to related-party investors.
Borrowings under each of these convertible notes bore interest at 3% per annum and these notes mature on June 30, 2018. As noted
below, the notes were assumed by Autotelic Inc. on November 15, 2016 as part of its acquisition of the technology asset (IT-101).
On
November 15, 2016, simultaneously with the Merger, Autotelic Inc. acquired a technology asset (IT-101) from IThenaPharma, and
IThenaPharma’s investment of $479 in foreign entity from IThenaPharma. In exchange for these assets, Autotelic Inc. agreed
to cancel all of the warrants to purchase shares of IThenaPharma common stock that it held as a result of the MSA, it received
all of IThenaPharma’s then cash balance as payment against the liabilities and it agreed to assume the remaining debts and
liabilities of IThenaPharma, including accounts payable of $71,560, accrued expenses of $11,470, amounts due to related party
of $5,375, other liabilities of $118,759, convertible note payable of $50,000, and accrued interest payable of $567.
PROPOSAL
NO. 2
APPROVAL
OF AN AMENDMENT TO OUR CERTIFICATE OF INCORPORATION TO EFFECT
A
REVERSE STOCK SPLIT AT THE DISCRETION OF THE BOARD OF DIRECTORS
We
are seeking your approval of an amendment to our amended and restated certificate of incorporation to authorize our Board of Directors
to effect a reverse stock split of our outstanding common stock in the range of one-for-two to one-for-ten, without further approval
of our shareholders, upon a determination by our Board of Directors that such a reverse stock split is in the best interests of
our company and our shareholders, at any time within two (2) years following the Annual Meeting. We currently anticipate that
we will implement a reverse split, if this Proposal No. 2 is authorized by our stockholders, during the second or third fiscal
quarter of 2017.
Our
common stock is presently listed on the OTCQB Tier of the OTC Markets. We believe that a reverse stock split may help facilitate
a future listing of our common stock on a national securities exchange, such one of the various tiers of NASDAQ, although we cannot
assure you that such a listing will ever occur.
In
addition to potentially listing our common stock on a national securities exchange, we believe that it may be in our best interests
to increase the per-share price of our common stock through a reverse stock split in order to enhance the desirability and marketability
of our common stock to the financial community and to attract different investors in future financings and in regular market trading.
Such considerations are particularly important to a company, such as ours, that anticipates engaging in equity financing transactions
in the near future.
Many
institutional investors have policies prohibiting them from holding lower-priced stocks in their own portfolios, which reduces
the number of potential buyers of our common stock. In addition, analysts at many leading brokerage firms are reluctant to recommend
lower-priced stocks to their clients or monitor the activity of lower-priced stocks. A variety of brokerage house policies and
practices also tend to discourage individual brokers within those firms from dealing in lower-priced stocks. Some of those policies
and practices pertain to the payment of brokers’ commissions and to time-consuming procedures that function to make the
handling of lower-priced stocks unattractive to brokers from an economic standpoint. We believe that if the reverse stock split
has the effect of increasing the trading price of our common stock, even if we do not list our common stock on a national securities
exchange, the investment community may find our common stock to be more attractive, which could promote greater liquidity for
our existing shareholders and could facilitate anticipated equity financing initiatives.
As
a result of the foregoing considerations, the Board of Directors has determined that it may be in our best interest to effect
a reverse stock split in the near future in an effort to increase the per-share price of our common stock and to create additional
“headroom” for potential future equity financing transactions, if any. As such, we are asking our shareholders to
approve an amendment to our amended and restated certificate of incorporation authorizing a reverse stock split in the range of
one-for-two to one-for-ten and granting the Board of Directors the discretion to effect the reverse stock split within this range
at any time within two (2) years following the Annual Meeting, and at such ratio that it determines appropriate. Further discussion
of the reasons for, and possible consequences of, the reverse stock split can be found below in the subsections titled “Reasons
for the Reverse Stock Split” and “Possible Effects of the Reverse Stock Split.”
If
this proposal is approved, the Board of Directors will have the authority, but not the obligation, in its sole discretion and
without any further action on the part of the shareholders, to effect, at any time within two (2) years following the Annual Meeting
that it believes to be most advantageous to us and to our shareholders, a reverse stock split in the range of one-for-two to one-for-ten.
This
proposal would give the Board the authority to implement one, but not more than one, reverse stock split. A reverse stock split
would be effected by the filing of an amendment to our amended and restated certificate of incorporation with the Secretary of
State of the State of Delaware. The Board of Directors will have the ability to decline to file the amendment to our amended and
restated certificate of incorporation without further shareholder action if it subsequently determines that a reverse stock split
is no longer in our best interest.
If
the reverse stock split is effected by the Board of Directors, the number of shares of common stock owned by each
shareholder will be reduced by the same proportion as the reduction in the total number of shares of common stock
outstanding, so that the percentage of the outstanding common stock owned by each shareholder after the reverse stock split
will remain approximately the same as the percentage owned before the reverse stock split. The proportions may not be exactly
the same due to the treatment of fractional shares that may result from the reverse stock split. The proposed reverse stock
split will reduce the number of shares of outstanding common stock; however, it will not have the effect of reducing the
number of shares of authorized common stock. Therefore: (i) assuming we effected a one-for-two reverse stock split on the
Record Date for this Annual Meeting, following such reverse stock split we would continue to have 180 million shares of
authorized common stock but there would only be approximately (x) 48.6 million shares of common stock issued and outstanding
and (y) 65.4 million shares of common stock issued and outstanding on a fully diluted basis after giving effect to the
exercise of all outstanding options and warrants and the conversion of all outstanding shares of preferred stock; and (ii)
assuming we effected a one-for-ten reverse stock split on the Record Date for this Annual Meeting, following such reverse
stock split we would continue to have 180 million shares of authorized common stock but there would only be approximately (A)
9.7 million shares of common stock issued and outstanding (B) and 13.1 million shares of common stock issued and outstanding
on a fully diluted basis after giving effect to the exercise of all outstanding options and warrants and the conversion of
all outstanding shares of preferred stock. As a result of these factors, the reverse stock split would in effect create
“headroom” in the form of more available authorized but unissued shares of common stock. Assuming passage of this
Proposal No. 2, we anticipate that we will utilize such additional “headroom” for the issuance of common stock
upon the exercise and/or conversion of outstanding options, warrants, preferred stock and convertible notes, in connection
with the granting of future awards under our equity incentive plans, and in connection with potential future equity financing
transactions, if any. As of the date of this proxy statement, we do not have any agreements, arrangements or understandings,
whether written or oral, relating to the issuance of the additional authorized shares of our common stock that will become
available as a result of the reverse split in any equity financing transactions.
Any
reverse stock split that we implement following approval of this Proposal No. 2 will not affect any shareholder’s individual
proportionate voting power, except to a minor extent due to the handling of fractional shares.
We
have granted equity awards to our employees as authorized by our equity incentive plans. The terms of each of the foregoing plans
provide for appropriate adjustment in the number and class of shares reserved for granting of awards and in the number, class
and prices of shares covered by the awards granted pursuant to such plans but not yet exercised. If the reverse split is implemented,
the Board of Directors or the applicable plan administrator will take the above-mentioned appropriate action(s). We will also
make appropriate adjustments to any outstanding stock options granted outside of the aforementioned plans to reflect the reverse
stock split. In addition, our outstanding warrants to purchase shares of common stock contain appropriate adjustments to the exercise
price of such warrants and the number of shares of common stock issuable upon exercise thereof to reflect the reverse stock split.
Further, the terms of our outstanding shares of preferred stock contain appropriate adjustments to the conversion price of such
shares of preferred stock and the number of shares of common stock issuable upon conversion thereof to reflect the reverse stock
split.
As
our common stock is registered under the Exchange Act, we are subject to the reporting and other requirements of the Exchange
Act. The reverse split, if implemented, will not affect the registration of our common stock under the Exchange Act or our reporting
or other requirements thereunder.
Reasons
for the Reverse Stock Split
Facilitating
the future listing of our common stock on a national securities exchange, of which there can be no assurance, and creating additional
“headroom” for potential future equity financing transactions, if any, and other corporate purposes, are the primary
reasons for the reverse stock split. As noted above, as of the date of this proxy statement, we do not have any agreements, arrangements
or understandings, whether written or oral, relating to the issuance of the additional authorized shares of our common stock that will become
available as a result of the reverse split in any equity financing transactions.
In
addition, we believe that it may be advantageous to increase the per-share price of our stock through a reverse stock split to
appeal to a broader range of investors in potential future financing transactions. A reverse stock split would result in a recapitalization
intended to increase the per share value of our common stock. However, even if we effect the reverse stock split, there can be
no assurance of either an immediate or a sustainable increase in the per share trading price of our common stock.
Our
Board of Directors believes that a reverse stock split would also be beneficial for the following reasons:
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It
could heighten the interest of the financial community in our company and potentially broaden the pool of investors that may
consider investing in our company by increasing the trading price of our common stock and decreasing the number of outstanding
shares of our common stock;
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It
could help to attract institutional investors who have internal policies that either prohibit them from purchasing stocks
below a certain minimum price or tend to discourage individual brokers from recommending such stocks to their customers; and
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It
may also encourage investors who had previously been dissuaded from purchasing our common stock because commissions on lower-priced
stocks generally represent a higher percentage of the stock price than commissions on higher-priced stocks.
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Text
of the Proposed Amendment
If
the Board determines to effect the reverse stock split following the approval of the proposal by our shareholders, we propose
to amend our amended and restated certificate of incorporation by adding a paragraph to Article FOURTH, paragraph (a), substantially
as follows:
“Effective
at __:__ EDT on _______, 20__ (the “Effective Time”), every ( ) shares of the Common Stock of the Corporation
issued and outstanding will be exchanged and combined, automatically, without further action, into one (1) share of the Common
Stock of the Corporation. At the Effective Time, there shall be no change in the number of authorized shares of Common Stock,
including the number authorized for each class of shares, which the Corporation shall have the authority to issue. Any fraction
of a share of Common Stock that would otherwise have resulted from the foregoing combination shall be converted into the right
to receive a cash payment from the Corporation for such fractional shares. The cash payment from the Corporation will be determined
by multiplying (x) the fractional amount of the share of Common Stock by (y) $____.”
Possible
Effects of the Reverse Stock Split
Once
the reverse stock split is implemented, our common shareholders will own a fewer number of shares than they currently own. Although
the Board expects that the reduction in outstanding shares of common stock will result in an increase in the per share price of
our common stock, there is no assurance that such a result will occur. Similarly, there is no assurance that the reverse stock
split will result in a permanent increase in the per share price, which can be dependent on several factors.
Should
the per share price of our common stock decline upon implementation of the reverse stock split, the percentage decline may be
greater than would occur in the absence of the reverse split.
The
anticipated resulting increase in per-share price of our common stock is expected to encourage interest in our common stock and
possibly promote greater liquidity for our shareholders and expand our equity financing opportunities. However, such liquidity
could also be adversely affected by the reduced number of shares that would be outstanding after the reverse stock split.
The
reverse stock split could be viewed negatively by the market and, consequently, could lead to a decrease in our overall market
capitalization. It is often the case that the reverse-split adjusted stock price and market capitalization of companies that effect
a reverse stock split decline, which has occurred with respect to our common stock in connection with prior reverse stock splits
that we have implemented.
The
number of shares held by each individual shareholder will be reduced if the reverse stock split is implemented. This will increase
the number of shareholders who hold less than a “round lot,” or 100 shares. Typically, the transaction costs to shareholders
selling “odd lots” are higher on a per share basis. Consequently, the reverse stock split could increase the transaction
costs to existing shareholders in the event they wish to sell all or a portion of their shares.
Procedures
for Effecting the Reverse Stock Split and Filing an Amendment to Our Amended and Restated Certificate of Incorporation
If
our shareholders approve the reverse stock split and our Board of Directors subsequently determines that it is in our best interests
to effect a reverse stock split, the amendment to our amended and restated certificate of incorporation will become effective
upon the filing of an amendment to our amended and restated certificate of incorporation with the Secretary of State of the State
of Delaware. The actual timing of any such filing will be made by the Board at such time as the Board believes to be most advantageous
to us and to our shareholders within two (2) years following the Annual Meeting.
Payment
for Fractional Shares
No
fractional shares of common stock would be issued as a result of the reverse stock split, if any. Instead, each shareholder otherwise
entitled to a fractional share would be entitled, upon surrender of the applicable stock certificate(s), to receive a cash payment
(without interest) in lieu of such fractional share.
Exchange
of Pre-Reverse Stock Split Shares with Post-Reverse Stock Split Shares
If
we implement a reverse stock split, our transfer agent will act as our exchange agent to act for holders of common stock in implementing
the exchange of their pre-reverse stock split shares for post-reverse stock split shares.
Registered
Book Entry Shareholder
. Holders of common stock holding all of their shares electronically in book-entry form with our transfer
agent do not need to take any action (the exchange will be automatic) to receive post-reverse stock split shares or cash payment
in lieu of any fractional share interest (as described above under “Payment for Fractional Shares”), if applicable.
Registered
Certificated Shareholder
. Some of our shareholders hold their shares in certificate form or a combination of certificate and
book-entry form. If any of your shares are held in certificate form, you will receive a transmittal letter from our transfer agent
as soon as practicable after the effective date of the reverse stock split. The letter of transmittal will contain instructions
on how to surrender your certificate(s) representing your pre-reverse stock split shares to the transfer agent. Upon receipt of
your pre-reverse stock split certificate(s), you will be issued the appropriate number of shares electronically in book-entry
form under the Direct Registration System (“DRS”), and if you are entitled to a payment in lieu of any fractional
share interest, payment will be made as described above under “Payment for Fractional Shares.” No new shares in book-entry
form will be issued and no payment in lieu of any fractional share interest will be made to you until you surrender your outstanding
pre-reverse stock split certificate(s), together with the properly completed and executed letter of transmittal, to the transfer
agent. At any time after receipt of your DRS statement, you may request a stock certificate representing your ownership interest.
SHAREHOLDERS
SHOULD NOT DESTROY ANY STOCK CERTIFICATES AND SHOULD NOT SUBMIT ANY CERTIFICATES UNTIL REQUESTED TO DO SO.
Accounting
Adjustments
We
anticipate that adjustments to our financial statements to reflect the reverse stock split, if any, will be minimal. Our stockholders’
equity, in the aggregate, will remain unchanged. Our historical earnings per share data would also be restated to reflect the
reverse stock split.
Certain
Material U.S. Federal Income Tax Consequences of the Reverse Stock Split
The
following summary of the federal income tax consequences of a reverse stock split, if any, is for general information only, and
it is not intended to be, nor should it be construed to be, legal or tax advice to any particular shareholder. The summary does
not address shareholders subject to special rules, such as persons who acquired shares of our common stock in compensatory transactions,
certain financial institutions, tax-exempt entities, regulated investment companies, insurance companies, partnerships or other
pass-through entities, persons who are not U.S. citizens or taxed as U.S. resident aliens, persons subject to the alternative
minimum tax, traders in securities that elect to use a mark-to-market method of accounting, individual retirement accounts or
tax-deferred accounts, dealers in securities or currencies, persons holding shares in connection with a hedging transaction, “straddle,”
conversion transaction or a synthetic security or other integrated transaction, and shareholders whose “functional currency”
is not the U.S. dollar. The following summary also assumes that shares of our common stock both before and after the reverse stock
split are held as a “capital asset” as defined by the Internal Revenue Code of 1986, as amended (the “Code”),
which is generally property held for investment. This summary is based on current law, including the Code, administrative pronouncements,
judicial decisions, existing and proposed Treasury Regulations, and interpretations of the foregoing, all as of the Record Date.
All of the foregoing authorities are subject to change (possibly with retroactive effect) and any such change may result in U.S.
federal income tax consequences to a stockholder that are materially different from those described below. This summary does not
address tax considerations under state, local, foreign and other laws.
Federal
Income Tax Consequences to the Company.
No gain or loss will be recognized by us as a result of a reverse stock split.
Federal
Income Tax Consequences to the Shareholders.
The reverse stock split is intended to constitute a reorganization within the
meaning of section 368 of the Code. Provided the reverse stock split does qualify as a reorganization, a shareholder generally
will not recognize gain or loss for U.S. federal income tax purposes on the reverse stock split (except with respect to any cash
received in lieu of a fractional share as described below). The aggregate adjusted basis of the post-reverse stock split shares
will be the same as the aggregate adjusted basis of the pre-reverse stock split shares exchanged therefore (excluding any portion
of the shareholder’s basis allocated to fractional share interests), and the holding period(s) of the post-reverse stock
split shares received will include the shareholder’s respective holding period(s) for the pre-reverse stock split shares
exchanged.
Because
the cash payment for fractional share interests represents a mere mechanical rounding off incident to the reverse stock split,
a shareholder who receives cash for fractional shares should generally recognize gain or loss, as the case may be, for U.S. federal
income tax purposes measured by the difference between the amount of cash received and the tax basis of such shareholder’s
pre-reverse stock split shares corresponding to the fractional share interest. Such gain or loss will be capital gain or loss,
and any such capital gain or loss will generally be long-term capital gain or loss to the extent such shareholder’s holding
period exceeds 12 months. The deductibility of capital losses may be subject to certain limitations.
Backup
Withholding.
A non-corporate shareholder may be subject to backup withholding at a 28% rate on cash payments received pursuant
to the reverse stock split unless such shareholder provides a correct taxpayer identification number to his or her broker or to
us and otherwise complies with applicable requirements of the backup withholding rules. Backup withholding is not an additional
U.S. federal income tax. Rather, any amount withheld under these rules will be creditable against the shareholder’s U.S.
federal income tax liability, provided the required information is furnished to the Internal Revenue Service.
Our
view regarding the tax consequences of the reverse stock split is not binding on the Internal Revenue Service or the courts. ACCORDINGLY,
EACH SHAREHOLDER SHOULD CONSULT HIS OR HER TAX ADVISOR TO DETERMINE THE PARTICULAR TAX CONSEQUENCES TO HIM OR HER OF A REVERSE
STOCK SPLIT, INCLUDING THE APPLICATION AND EFFECT OF FEDERAL, STATE, LOCAL AND/OR FOREIGN INCOME TAX AND OTHER LAWS.
Vote
Required and Board of Directors’ Recommendation
Assuming
a quorum is present, the affirmative vote of a majority of the votes entitled to be cast by holders of our common stock, either
in person or by proxy, is required for approval of Proposal No. 2. For purposes of approval of Proposal No. 2, abstentions and
broker non-votes will have the same effect as a vote against this proposal.
THE
BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS
VOTE
“FOR” PROPOSAL NO. 2.
PROPOSAL
NO. 3
APPROVAL
OF AN AMENDMENT TO OUR 2014 LONG-TERM INCENTIVE PLAN TO INCREASE
THE
NUMBER OF SHARES AVAILABLE THEREUNDER FROM 5,000,000 TO 10,000,000
Our
Board of Directors unanimously adopted, subject to stockholder approval at the Annual Meeting, an amendment to the Marina Biotech,
Inc. 2014 Long-Term Incentive Plan (the “2014 Plan”) to increase the number of shares of common stock authorized for
issuance thereunder from 5,000,000 shares to 10,000,000 shares (without giving effect to the proposed reverse split). As part
of this process, the Board of Directors reviewed the number of shares available under the 2014 Plan, and determined that the approximately
2.6 million shares available for grant thereunder represented an insufficient number of shares to enable us to provide sufficient
future grants of stock options or other stock awards, as we seek to expand our business operations following the November 2016
merger with IThenaPharma. As a result, we believe that the amendment is necessary and in the best interests of our company and
its long-term strategic growth to permit us to continue to attract, retain and motivate officers, employees, non-employee directors
and consultants.
Assuming
approval of this Proposal No. 3, the number of shares of common stock available under the 2014 Plan would represent approximately
10.3% of the shares of common stock outstanding on the Record Date, or approximately 7.6% assuming the conversion in full of all
of our outstanding shares of convertible preferred stock and exercise in full of all of our outstanding options and warrants as
of such date.
The
purpose of the 2014 Plan is to further and promote the interests of our company, its subsidiaries and its stockholders by enabling
our company and its subsidiaries to attract, retain and motivate employees, directors and consultants or those who will become
employees, directors or consultants of the company and/or its subsidiaries, and to align the interests of those individuals and
our stockholders. To do this, the 2014 Plan offers performance-based incentive awards and equity-based opportunities providing
employees, directors and consultants with a proprietary interest in maximizing the growth, profitability and overall success of
our company and/or its subsidiaries.
Potentially
all of our employees, officers and directors are eligible to participate in the 2014 Plan. Because participation in, and the types
of awards that may be made under, the 2014 Plan are subject to the discretion of the Compensation Committee (or the Board, as
applicable), we cannot determine the dollar value or number of shares of common stock that will in the future be received by or
allocated to any participant or groups of participants, including our directors, executive officers and other employees. As of
April 7, 2017, there were three executive officers and four non-employee directors of our company who were eligible to participate
in the 2014 Plan. During the 2016 fiscal year, we granted options to purchase up to an aggregate of 35,000 shares of common stock
to our Named Executive Officers as a group (excluding options granted to Mr. Ramelli in January 2016 in his capacity as a non-employee
director), all of which were granted to Mr. Ramelli. During the 2016 fiscal year we also granted options to purchase up to an
aggregate of 257,000 shares to our non-employee directors as a group, and zero options to our employees (other than executive
officers) as a group. As of April 7, 2017, the closing price of our common stock on the OTCQB Tier of the OTC Markers was $0.42
per share.
The
following is a brief description of the 2014 Plan. The full text of the 2014 Plan is attached as Annex A to the Proxy Statement
for Marina Biotech’s 2014 Annual Meeting of Stockholders held on September 15, 2014, and the following description is qualified
in its entirety by reference thereto. We urge you to read the 2014 Plan document carefully for a complete statement of the provisions
summarized herein.
It
is the judgment of the Board of Directors that approval of the amendment to the 2014 Plan to increase the number of shares available
for issuance thereunder from 5,000,000 shares to 10,000,000 shares is in the best interests of our company and our stockholders.
Administration
The
administration, interpretation and operation of the 2014 Plan is vested in a committee appointed by our Board (the “Committee”).
The Committee may designate persons other than members of the Committee to carry out the day-to-day administration of the 2014
Plan. In addition, the Committee may, in its sole discretion, delegate day-to-day ministerial administration to persons other
than members of the Committee, except that the Committee shall not delegate its authority with regard to selection for participation
in the 2014 Plan and/or the granting of any Awards to Participants. In the event that our Board has not appointed the Committee,
then our Board shall have all the powers of the Committee under the 2014 Plan.
Eligibility
Employees,
directors and consultants, or those who will become employees, directors and/or consultants of our company and/or its subsidiaries
are eligible to receive awards under the 2014 Plan. Awards under the 2014 Plan will be made by the Committee. No determination
has been made as to future awards which may be granted under the 2014 Plan, although it is anticipated that recipients of awards
will include the current executive officers and directors of our company.
Awards
Under the 2014 Plan
Introduction
.
Awards under the 2014 Plan may consist of stock options, stock appreciation rights (“SARs”), restricted shares or
performance unit awards, each of which is described below. All awards will be evidenced by an award agreement between us and the
individual participant and approved by the Committee. In the discretion of the Committee, an eligible employee, director or consultant
may receive awards from one or more of the categories described below, and more than one award may be granted to an eligible employee,
director or consultant.
Stock
Options and Stock Appreciation Rights
. A stock option is an award that entitles a participant to purchase shares of common
stock at a price fixed at the time the option is granted. Stock options granted under the 2014 Plan may be in the form of incentive
stock options (which qualify for special tax treatment) or non-qualified stock options, and may be granted alone or in addition
to other awards under the 2014 Plan. Non-qualified stock options may be granted alone or in tandem with SARs.
An
SAR entitles a participant to receive, upon exercise, an amount equal to (a) the excess of (i) the fair market value on the exercise
date of a share of common stock, over (ii) the fair market value of a share of common stock on the date the SAR was granted, multiplied
by (b) the number of shares of common stock for which the SAR has been exercised.
The
exercise price and other terms and conditions of stock options and the terms and conditions of SARs will be determined by the
Committee at the time of grant, provided, however, that the exercise price per share may not be less than 100 percent of the fair
market value of a share of common stock on the date of the grant. In addition, the term of any incentive stock options granted
under the 2014 Plan may not exceed ten years. An option or SAR grant under the 2014 Plan does not provide an optionee any rights
as a stockholder and such rights will accrue only as to shares actually purchased through the exercise of an option or the settlement
of an SAR.
If
stock options and SARs are granted together in tandem, the exercise of such stock option or the related SAR will result in the
cancellation of the related stock option or SAR to the extent of the number of shares in respect of which such option or SAR has
been exercised.
Stock
options and SARs granted under the 2014 Plan shall become exercisable at such time as designated by the Committee at the time
of grant.
Payment
for shares issuable pursuant to the exercise of a stock option (and applicable tax withholding) may be made either in cash, by
certified check, bank draft, or money order, or, by delivery of shares satisfying such requirements as the Committee shall establish,
or through such other mechanism as the Committee shall permit in its sole discretion.
In
addition, the Committee, in its sole discretion, may provide in any stock option or SAR award agreement that the recipient of
the stock option or SAR will be entitled to dividend equivalents with respect to such award. In such instance, in respect of any
such award which is outstanding on a dividend record date for common stock, the participant would be entitled to an amount equal
to the amount of cash or stock dividends that would have paid on the shares of common stock covered by such stock option or SAR
award had such shares of common stock been outstanding on the dividend record date.
Restricted
Share Awards
. Restricted share awards are grants of common stock made to a participant subject to conditions established by
the Committee in the relevant award agreement on the date of grant. The restricted shares only become unrestricted in accordance
with the conditions and vesting schedule, if any, provided in the relevant award agreement. A participant may not sell or otherwise
dispose of restricted shares until the conditions imposed by the Committee with respect to such shares have been satisfied. Restricted
share awards under the 2014 Plan may be granted alone or in addition to any other awards under the 2014 Plan. Restricted shares
which vest will be reissued as unrestricted shares of common stock.
Each
participant who receives a grant of restricted shares will have the right to receive all dividends and vote or execute proxies
for such shares. Any stock dividends granted with respect to such restricted shares will be treated as additional restricted shares.
Performance
Units
. Performance units (with each unit representing a monetary amount designated in advance by the Committee) are awards
which may be granted to participants alone or in addition to any other awards under the 2014 Plan. Participants receiving performance
unit grants will only earn such units if our company and/or the participant achieve certain performance goals during a designated
performance period. The Committee will establish such performance goals and may use measures such as total stockholder return,
return on equity, net earnings growth, sales or revenue growth, comparison to peer companies, individual or aggregate participant
performance or such other measures the Committee deems appropriate. The participant may forfeit such units in the event the performance
goals are not met. If all or a portion of a performance unit is earned, payment of the designated value thereof will be made in
cash, in unrestricted common stock or in restricted shares or in any combination thereof, as provided in the relevant award agreement.
Recapitalization
Adjustments
. In the event that our Board determines that any dividend or other distribution (whether in the form of cash,
common stock, other securities, or other property), recapitalization, stock split, reverse stock split, reorganization, merger,
consolidation, split-up, spin-off, combination, repurchase, or exchange of common stock or other securities of our company, or
other corporate transaction or event affects the common stock such that an adjustment is determined by our Board, in its sole
discretion, to be necessary or appropriate in order to prevent dilution or enlargement of benefits or potential benefits intended
to be made available under the 2014 Plan, our Board may, in any manner that it in good faith deems equitable, adjust any or all
of (i) the number of shares of common stock or other securities of our company (or number and kind of other securities or property)
with respect to which awards may be granted, (ii) the number of shares of common stock or other securities of our company (or
number and kind of other securities or property) subject to outstanding awards, and (iii) the exercise price with respect to any
stock option, or make provision for an immediate cash payment to the holder of an outstanding award in consideration for the cancellation
of such award.
Mergers
.
If our company enters into or is involved in any merger, reorganization, recapitalization, sale of all or substantially all of
its assets, liquidation, or business combination with any person or entity (a “Merger Event”), our Board may, prior
to such Merger Event and effective upon such Merger Event, take any action that it deems appropriate, including, replacing such
stock options with substitute stock options and/or SARs in respect of the shares, other securities or other property of the surviving
corporation or any affiliate of the surviving corporation on such terms and conditions, as to the number of shares, pricing and
otherwise, which shall substantially preserve the value, rights and benefits of any affected stock options or SARs granted under
the 2014 Plan as of the date of the consummation of the Merger Event. If any Merger Event occurs, our company has the right, but
not the obligation, to cancel each participant’s stock options and/or SARs and to pay to each affected participant in connection
with the cancellation of such stock options and/or SARs, an amount equal to the excess of the fair market value, as determined
by our Board, of the common stock underlying any unexercised stock options or SARs (whether then exercisable or not) over the
aggregate exercise price of such unexercised stock options and/or SARs. Upon receipt by any affected participant of any such substitute
stock options, SARs (or payment) as a result of any such Merger Event, such participant’s affected stock options and/or
SARs for which such substitute options and/or SARs (or payment) were received shall be thereupon cancelled without the need for
obtaining the consent of any such affected participant.
Amendment,
Suspension or Termination of the 2014 Plan
Unless
earlier terminated by our Board, the 2014 Plan shall terminate on December 31, 2023. Our Board may amend, suspend or terminate
the 2014 Plan (or any portion thereof) at any time. However, no amendment shall (a) materially adversely affect the rights of
any participant under any outstanding award, without the consent of such participant, or (b) make any change that would disqualify
the 2014 Plan from the benefits provided under Sections 422 and 162(m) of the Internal Revenue Code of 1986 (the “Code”),
or (c) increase the number of shares available for awards under the 2014 Plan without stockholder approval; provided, however,
that our Board and/or Committee may amend the 2014 Plan, without the consent of any participants, in any way it deems appropriate
to satisfy Code Section 409A and any regulations or other authority promulgated thereunder, including any amendment to the 2014
Plan to cause certain Awards not to be subject to Code Section 409A.
Certain
Federal Income Tax Consequences of the 2014 Plan
The
following is a brief and general summary of some United States federal income tax consequences applicable to the 2014 Plan. The
summary does not reflect any provisions of the income tax laws of any state, local or foreign taxing jurisdiction. Because the
tax consequences of events and transactions under the 2014 Plan depend upon various factors, including an individual’s own
tax status, each participant who receives an award under the 2014 Plan should consult a tax advisor.
Incentive
Stock Options
. Stock options granted under the 2014 Plan may be incentive stock options (within the meaning of Section 422
of the Code) or non-qualified stock options. Upon the grant of an incentive stock option, the optionee will not recognize any
income. Generally, no income is recognized by the optionee upon the exercise of an incentive stock option. The optionee must increase
his or her alternative minimum taxable income for the taxable year in which he or she exercised the incentive stock option by
the amount that would have been ordinary income had the option not been an incentive stock option.
Upon
the subsequent disposition of shares acquired upon the exercise of an incentive stock option, the federal income tax consequences
will depend upon when the disposition occurs and the type of disposition. If the shares are disposed of by the optionee after
the later to occur of (i) the end of the two year period beginning the day after the day the incentive stock option is awarded
to the optionee, or (ii) the end of the one-year period beginning on the day after the day the shares are issued to the optionee
(the later of (i) or (ii) being the “ISO Holding Period”), any gain or loss realized upon such disposition will be
long-term capital gain or loss, and our company (or a subsidiary) will not be entitled to any income tax deduction in respect
of the option or its exercise. For purposes of determining the amount of such gain or loss, the optionee’s tax basis in
the shares will be the option price.
Generally,
if the shares are disposed of by the optionee in a taxable disposition within (i) the two year period beginning on the day after
the day the option was awarded to the optionee, or (ii) the one-year period beginning on the day after the day the shares are
issued to the optionee, the excess, if any, of the amount realized (up to the fair market value of the shares on the exercise
date) over the option price will be compensation taxable to the optionee as ordinary income, and our company generally will be
entitled to a deduction (subject to the provisions of Section 162(m) of the Code discussed below under the caption “Limits
on Deductions”) equal to the amount of ordinary income realized by the optionee. Any amount realized upon such a disposition
by the optionee in excess of the fair market value of the shares on the exercise date will be capital gain.
If
an optionee has not remained an employee of our company during the period beginning with the grant of an incentive stock option
and ending on the day three months (one year if the optionee becomes disabled) before the date the option is exercised (other
than in the case of the optionee’s death), the exercise of such option will be treated as the exercise of a non-qualified
stock option with the tax consequences described below.
Non-Qualified
Stock Options
. In general, upon the grant of a non-qualified stock option, an optionee will not recognize any income. At the
time a nonqualified option is exercised, the optionee will recognize compensation taxable as ordinary income, and our company
generally will be entitled to a deduction (subject to the provisions of Section 162(m) of the Code discussed below under the caption
“Limits on Deductions”), in an amount equal to the difference between the fair market value on the exercise date of
the shares acquired pursuant to such exercise and the option price. Upon a subsequent disposition of the shares, the optionee
will recognize long- or short-term capital gain or loss, depending upon the holding period of the shares. For purposes of determining
the amount of such gain or loss, the optionee’s tax basis in the shares will be the fair market value of such shares on
the exercise date.
Effect
of Share-for-Share Exercise
. If an optionee elects to tender shares of common stock in partial or full payment of the option
price for shares to be acquired through the exercise of an option, generally the optionee will not recognize any gain or loss
on such tendered shares. However, if the shares tendered in connection with any share-for-share exercise were previously acquired
upon the exercise of an incentive stock option, and such share-for-share exercise occurs during the ISO Holding Period for such
shares, then there will be a taxable disposition of the tendered shares with the tax consequences described above for the taxable
dispositions during the ISO Holding Period of the shares acquired upon the exercise of an incentive stock option.
If
the optionee tenders shares upon the exercise of a nonqualified option, the optionee will recognize compensation taxable as ordinary
income and our company generally will be entitled to a deduction (subject to the provisions of Section 162(m) of the Code discussed
below under the caption “Limits on Deductions”) in an amount equal only to the fair market value of the number of
shares received by the optionee upon exercise which is in excess of the number of tendered shares, less any cash paid by the optionee.
Restricted
Shares
. A participant will not recognize any income upon the award of restricted shares unless the participant makes an election
under Section 83(b) of the Code in respect of such grant, as described below. Unless a participant has made an election under
Section 83(b) of the Code in respect of any restricted shares, any dividends received by the participant with respect to restricted
shares prior to the date the participant recognizes income with respect to such award (as described below) must be treated by
the participant as compensation taxable as ordinary income, and our company will be entitled to a deduction, in an amount equal
to the amount of ordinary income recognized by the participant. After the terms and conditions applicable to the restricted shares
are satisfied, or if the participant has made an election under Section 83(b) of the Code in respect of the restricted shares,
any dividends received by the participant in respect of such award will be treated as a dividend taxable as ordinary income, and
our company will not be entitled to a deduction in respect of any such dividend payment.
Unless
the participant has made an election under Section 83(b) of the Code (as described below), at the time the terms and conditions
applicable to the restricted shares are satisfied, a participant will recognize compensation taxable as ordinary income, and our
company generally will be entitled to a deduction, in an amount equal to the then fair market value of the shares of common stock
for which the terms and conditions applicable to the restricted share award have been satisfied. The participant’s tax basis
for any such shares of common stock would be the fair market value on the date such terms and conditions are satisfied.
A
participant may irrevocably elect under Section 83(b) of the Code to recognize compensation taxable as ordinary income, and our
company will be entitled to a corresponding deduction, in an amount equal to the fair market value of such restricted shares (determined
without regard to any restrictions thereon) on the date of grant. Such an election must be made by the participant not later than
thirty (30) days after the date of grant. If such an election is made, no income would be recognized by the participant (and our
company will not be entitled to a corresponding deduction) at the time the applicable terms and conditions are satisfied. The
participant’s tax basis for the restricted shares received and for any shares of common stock subsequently held in respect
thereof would be the fair market value of the restricted shares (determined without regard to any restrictions thereon) on the
date of grant. If a participant makes such an election and subsequently all or part of the award is forfeited, the participant
will not be entitled to a deduction as a result of such forfeiture.
The
holding period for capital gain or loss purposes in respect of the common stock underlying an award of restricted shares shall
commence when the terms and conditions applicable to the restricted shares are satisfied, unless the participant makes a timely
election under Section 83(b) of the Code. In such case, the holding period will commence immediately after the grant of such restricted
shares.
Performance
Units
. A participant will not recognize any income upon the award of a performance unit. If the performance goals applicable
to the performance unit are achieved during the applicable performance period and such performance units are earned, a participant
will recognize compensation taxable as ordinary income when he or she receives payment with respect to such performance unit,
and at such time the company will be entitled to a deduction equal to the amount of cash or the then fair market value of unrestricted
common stock received by the participant in payment of the performance units. The participant’s tax basis for any such shares
of common stock would be the fair market value on the date such unrestricted shares are transferred to the participant. If all
or a portion of the performance units are paid in restricted shares, see “Restricted Shares” above for a discussion
of the applicable tax treatment.
Limits
on Deductions
. Under Section 162(m) of the Code, the amount of compensation paid to our chief executive officer and our four
other most highly paid executive officers in the year for which a deduction is claimed by our company (including its subsidiaries)
is limited to $1,000,000 per person in any year, except that qualified performance-based compensation will be excluded for purposes
of calculating the amount of compensation subject to this $1,000,000 limitation. Our ability to claim a deduction for compensation
paid to any other executive officer or employee of our company (including its subsidiaries) is not affected by this provision.
We
have structured the 2014 Plan so that we may claim a deduction in connection with (i) the exercise of non-qualified stock options
and/or SARs, (ii) the disposition during the ISO Holding Period by an optionee of shares acquired upon the exercise of incentive
stock options, and (iii) the payment of any performance units, provided that, in each case, the requirements imposed on qualified
performance-based compensation under Section 162(m) of the Code and the regulations thereunder are satisfied with respect to such
awards. Restricted share awards under the 2014 Plan that vest solely upon the passage of time will not be qualified performance-based
compensation under Section 162(m) of the Code. Any deduction we may claim upon the lapse of any restrictions on such restricted
share awards will be subject to the limitations on deductibility under Section 162(m).
Additional
Information
. The recognition by an employee of compensation income with respect to a grant or an award under the 2014 Plan
will be subject to withholding for federal income and employment tax purposes. If an employee, to the extent permitted by the
terms of a grant or award under the 2014 Plan, uses shares of common stock to satisfy the federal income and employment tax withholding
obligation, or any similar withholding obligation for state and local tax obligations, the employee will recognize a capital gain
or loss, short-term or long-term, depending on the tax basis and holding period for such shares of common stock.
In
the event of a change of control, certain compensation payments or other benefits received by “disqualified individuals”
(as defined in Section 280G(c) of the Code) under the 2014 Plan or otherwise may cause or result in “excess parachute payments”
(as defined in Section 280G(b)(I) of the Code). Pursuant to Section 280G of the Code, any amount that constitutes an excess parachute
payment is not deductible by the company. In addition, Section 4999 of the Code generally imposes a 20% excise tax on the amount
of any such excess parachute payment received by such a disqualified individual, and any such excess parachute payments will not
be deductible by our company (or a subsidiary).
Interest
of Certain Persons
Each
of our directors and executive officers would be eligible to participate in the 2014 Plan. As a result, approval of the 2014 Plan
impacts each of our directors and executive officers and each of them has a personal interest in this proposal and its approval
by our stockholders.
Vote
Required and Board of Directors’ Recommendation
Assuming
a quorum is present, the affirmative vote of a majority of the shares present at the Annual Meeting, either in person or by proxy,
and entitled to vote, is required for approval of this Proposal No. 3. For purposes of the approval of Proposal No. 3, abstentions
will have the same effect as a vote against this proposal, and broker non-votes will have no effect on the result of the vote.
THE
BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT
STOCKHOLDERSVOTE
“FOR” PROPOSAL NO. 3.
PROPOSAL
NO. 4
RATIFICATION
OF APPOINTMENT OF
INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
We
have appointed Squar Milner LLP (“Squar”) to serve as our independent registered public accounting firm for the fiscal
year ending December 31, 2017. Squar has served as our independent registered public accounting firm since December 8, 2016. Squar
had also served as the independent registered public accounting firm for IThenaPharma since October 2015. Prior to December 8,
2016, Wolf & Company, P.C. (“Wolf”) served as the independent registered public accounting firm for Marina Biotech.
The change of accounting firms is described below.
In
the event that ratification of this appointment of independent registered public accounting firm is not approved by the affirmative
vote of a majority of votes cast on the matter, then the appointment of our independent registered public accounting firm will
be reconsidered by us.
Your
ratification of the appointment of Squar as our independent registered public accounting firm for the fiscal year ending December
31, 2017 does not preclude us from terminating our engagement of Squar and retaining a new independent registered public accounting
firm, if we determine that such an action would be in our best interest.
Total
fees to our independent registered public accounting firms for the years ended December 31, 2016 and 2015 were $0.113 million
and $0.166 million, respectively, of which (x) $0.045 million was paid to Squar during 2016 and $0.068 was paid to Wolf during
2016; and (y) $0.045 million was paid to Squar by IThena during 2015 and $0.121 million was paid to Wolf by Marina Biotech during
2015. The foregoing amounts were comprised of the amounts set forth below.
Audit
Fees.
The aggregate fees for professional services rendered in connection with (i) the audit of our annual financial statements,
(ii) the review of the financial statements included in our Quarterly Reports on Form 10-Q for the quarters ended March 31, June
30 and September 30, (iii) consents and comfort letters issued in connection with equity offerings and (iv) services provided
in connection with statutory and regulatory filings or engagements were $0.108 million for the year ended December 31, 2016 and
$0.145 million for the year ended December 31, 2015, of which (x) $0.04 million was paid to Squar during 2016 and $0.068 was paid
to Wolf during 2016; and (y) $0.045 million was paid to Squar by IThena during 2015 and $0.1 million was paid to Wolf by Marina
Biotech during 2015.
Audit-Related
Fees.
The aggregate fees related to audits that are not included in the above were $0 million for the year ended December
31, 2016 and $0.021 million for the year ended December 31, 2015, all of which was paid to Wolf by Marina Biotech during 2015.
Tax
Fees.
We did not incur any fees to our independent registered public accounting firm for professional services rendered in
connection with tax compliance, tax planning and federal and state tax advice for the years ended December 31, 2016 and December
31, 2015, other than $0.005 million incurred by IThenaPharma to Squar during 2016.
All
Other Fees.
We did not incur any such other fees to our independent registered public accounting firm for the years ended
December 31, 2016 and December 31, 2015.
Changes
in and Disagreements with Accountants on Accounting and Financial Disclosure
On
December 8, 2016, Squar was engaged as our independent registered public accounting firm for the year ending December 31, 2016.
The appointment of Squar was approved by our Board. During the fiscal years ended December 31, 2015 and 2014 and during the subsequent
interim period from January 1, 2016 through December 8, 2016, neither Marina Biotech nor anyone on behalf of Marina Biotech consulted
Squar regarding either (i) the application of accounting principles to a specified transaction, either completed or proposed,
or the type of audit opinion that might be rendered on the financial statements of Marina Biotech, and neither a written report
nor oral advice was provided to Marina Biotech that Squar concluded was an important factor considered by Marina Biotech in reaching
a decision as to any accounting, auditing or financial reporting issue, or (ii) any matter that was either the subject of a “disagreement”
or a “reportable event”, each as defined in Regulation S-K Item 304(a)(1)(v), respectively.
Prior
to the appointment of Squar as our independent registered public accounting firm, Squar served as the independent registered public
accounting firm for IThenaPharma since October 2015.
Also
on December 8, 2016, we dismissed Wolf as our independent registered public accounting firm. The decision to change our independent
registered public accounting firm was approved by our Board.
Wolf’s
report on the financial statements of Marina Biotech for either of the fiscal years ended December 31, 2015 and 2014 did not contain
an adverse opinion or a disclaimer of opinion, or qualification or modification as to uncertainty, audit scope or accounting principles,
except that such report on the financial statements of Marina Biotech contained an explanatory paragraph in regard to the substantial
doubt about Marina Biotech’s ability to continue as a going concern.
During
Marina Biotech’s fiscal years ended December 31, 2015 and 2014 and during the subsequent interim period from January 1,
2016 through December 8, 2016, (i) there were no disagreements, resolved or not, with Wolf on any matter of accounting principles
or practices, financial statement disclosure, or audit scope or procedures that, if not resolved to Wolf’s satisfaction,
would have caused Wolf to make reference to the subject matter of the disagreement in connection with its reports and (ii) there
were no “reportable events” as defined in Item 304(a)(1)(v) of Regulation S-K, except that Wolf advised Marina Biotech
of the following financial reporting deficiencies that represent material weaknesses as of December 31, 2013 as described in Marina
Biotech’s Annual Report on Form 10-K for the fiscal year ended December 31, 2013, which annual report was filed with the
SEC on March 30, 2014:
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Financial
Reporting Process: Because of the financial challenges that Marina Biotech faced during the 2013 fiscal year and during subsequent
reporting periods prior to the filing of the Annual Report on Form 10-K for the 2013 fiscal year, Marina Biotech did not maintain
a financial reporting process which would have enabled Marina Biotech to issue timely financial statements as required by
the rules of the SEC.
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Qualified
Personnel: Marina Biotech determined that processes and controls over timely impairment testing of long-lived assets were
inadequate at such time primarily because Marina Biotech lacked the resources at such time to acquire the necessary valuation
expertise to operate effective processes and controls over the impairment testing of long-lived assets. As a result, a reasonable
possibility existed at such time that material misstatements in Marina Biotech’s financial statements would not be prevented
or detected on a timely basis.
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The
foregoing material weaknesses were remediated during Marina Biotech’s 2014 fiscal year, as noted in Marina’s Annual
Report on Form 10-K for the fiscal year ended December 31, 2014.
Pre-Approval
Policies and Procedures
The
Audit Committee has the authority to appoint or replace our independent registered public accounting firm (subject, if applicable,
to stockholder ratification). The Audit Committee is also responsible for the compensation and oversight of the work of the independent
registered public accounting firm (including resolution of disagreements between management and the independent registered public
accounting firm regarding financial reporting) for the purpose of preparing or issuing an audit report or related work. The independent
registered public accounting firm was engaged by, and reports directly to, the Audit Committee.
The
Audit Committee pre-approves all audit services and permitted non-audit services (including the fees and terms thereof) to be
performed for us by our independent registered public accounting firm, subject to the
de minimis
exceptions for non-audit
services described in Section 10A(i)(1)(B) of the Exchange Act and Rule 2-01(c)(7)(i)(C) of Regulation S-X, provided that all
such excepted services are subsequently approved prior to the completion of the audit. In the event pre-approval for such audit
services and permitted non-audit services cannot be obtained as a result of inherent time constraints in the matter for which
such services are required, the Chairman of the Audit Committee had been granted the authority to pre-approve such services, provided
that the estimated cost of such services on each such occasion does not exceed $15,000, and the Chairman of the Audit Committee
reported for ratification such pre-approval to the Audit Committee at its next scheduled meeting. We have complied with the procedures
set forth above, and the Audit Committee has otherwise complied with the provisions of its charter.
Vote
Required and Board of Directors’ Recommendation
Assuming
a quorum is present, the affirmative vote of a majority of the shares present at the Annual Meeting and entitled to vote, either
in person or by proxy, is required for approval of Proposal No. 4. For purposes of the ratification of our independent registered
public accounting firm, abstentions will have the same effect as a vote against this proposal and broker non-votes will have no
effect on the result of the vote.
THE
BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS
VOTE
“FOR” PROPOSAL NO. 4.
PROPOSAL
NO. 5
ADVISORY
VOTE ON EXECUTIVE COMPENSATION
We
are providing stockholders an advisory vote on executive compensation. This nonbinding vote is required under Section 14A of the
Exchange Act. At our Annual Meeting of Stockholders held in September 2014, our stockholders indicated their preference that the
advisory vote on executive compensation be held on an annual basis, and we intend to seek an advisory vote on executive compensation
annually.
The
section entitled “Executive Compensation” describes the compensation of our chief executive officer and our other
most highly compensated executive officers during the 2016 fiscal year. Our executive officers are referred to in this Proposal
No. 5 as our named executive officers.
Our
Board of Directors believes that the policies, procedures and compensation articulated in the “Executive Compensation”
section of this proxy statement are appropriate for our company, and that the compensation of our named executive officers in
2016 reflects and supports these compensation policies and procedures.
We
are asking our stockholders to indicate their support at the Annual Meeting for the compensation of our named executive officers
as described in this proxy statement. This vote is intended to provide an overall assessment of our policies and procedures relating
to the compensation of our named executive officers, rather than focus on any specific item of compensation. Accordingly, we are
recommending that our stockholders vote FOR the following resolution:
RESOLVED,
that the stockholders of Marina Biotech, Inc. approve, on an advisory basis, the compensation of the named executive officers
of Marina Biotech, Inc., as disclosed in this proxy statement for the 2017 Annual Meeting of Stockholders pursuant to Item 402
of Regulation S-K, including, as applicable, the Summary Compensation Table and the other related tables and disclosures contained
in the section of this proxy statement captioned “Executive Compensation”.
This
advisory vote on executive compensation, commonly referred to as a ‘say-on-pay’ advisory vote, is not binding on our
Board of Directors. However, our Board of Directors will take into account the result of the vote when determining future executive
compensation arrangements.
Vote
Required and Board of Directors’ Recommendation
Assuming
a quorum is present, the affirmative vote of a majority of the shares present at the Annual Meeting, either in person or by proxy,
and entitled to vote, is required for approval of this Proposal No. 5. Because your vote is advisory, it will not be binding upon
our Board of Directors. For purposes of the approval of Proposal No. 5, abstentions will have the same effect as a vote against
this proposal, and broker non-votes will have no effect on the result of the vote.
THE
BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS
VOTE
“FOR” PROPOSAL NO. 5.
REPORT
OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
The
Audit Committee of the Board of Directors, on behalf of the Board of Directors, serves as an independent and objective party to
monitor and provide general oversight of the integrity of our financial statements, the independent registered public accounting
firm’s qualifications and independence, the performance of the independent registered public accounting firm, the compliance
by us with legal and regulatory requirements and our standards of business conduct. The Audit Committee performs these oversight
responsibilities in accordance with its Audit Committee Charter.
Our
management is responsible for preparing our financial statements and our financial reporting process. Our independent registered
public accounting firm is responsible for performing an independent audit of our consolidated financial statements in accordance
with the standards of the Public Company Accounting Oversight Board (“PCAOB”). The Audit Committee’s responsibility
is to administer and oversee these processes.
The
Audit Committee met with the independent registered public accounting firm, with and without management present, to discuss the
audit plan, the results of their examinations, and the overall quality of our financial reporting.
In
this context, the Audit Committee has reviewed and discussed the audited financial statements for the year ended December 31,
2016 with management and with the independent registered public accounting firm. The Audit Committee has discussed with the independent
registered public accounting firm the matters required to be discussed by Auditing Standard No. 16,
Communications with Audit
Committees
, which includes, among other items, matters related to the conduct of the audit of our annual financial statements.
The
Audit Committee has also received the written disclosures and the letter from the independent registered public accounting firm
required by applicable requirements of the PCAOB regarding the independent accountant’s communications with the Audit Committee
concerning independence, and has discussed with the independent registered public accounting firm the issue of its independence
from us and management. In addition, the Audit Committee has considered whether the provision of any non-audit services by the
independent registered public accounting firm in 2016 is compatible with maintaining the registered public accounting firm’s
independence and has concluded that it is.
Based
on its review of the audited financial statements and the various discussions noted above, the Audit Committee recommended to
the Board of Directors that the audited financial statements be included in our Annual Report on Form 10-K for the year ended
December 31, 2016.
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Respectfully,
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Donald
A. Williams, Chairman
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Philip
C. Ranker
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Philippe
Calais
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The
foregoing Audit Committee Report does not constitute soliciting material and shall not be deemed filed or incorporated by reference
into any of our filings under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except
to the extent we specifically incorporate this Audit Committee Report by reference therein.
EXECUTIVE
COMPENSATION
Summary
Compensation Table
The
following table sets forth information regarding compensation earned during 2016 and 2015 by our CEO and our other most highly
compensated executive officers as of the end of the 2016 fiscal year (“Named Executive Officers”).
Name and Principal Position
|
|
Year
|
|
|
Salary
($)
|
|
|
Bonus
($)
|
|
|
Stock
Awards
($)
|
|
|
Option
Awards
($)
(1)
|
|
|
All Other
Compensation
($)
|
|
|
Total
($)
|
|
J. Michael French, former
|
|
|
2016
|
|
|
|
169,897
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
5,300
|
(4)
|
|
|
175,197
|
|
President,
CEO & and Director of Marina
Biotech
(2)
|
|
|
2015
|
|
|
|
425,000
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
425,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Joseph W. Ramelli
|
|
|
2016
|
|
|
|
82,500
|
(7)
|
|
|
—
|
|
|
|
—
|
|
|
|
11,448
|
(5)
|
|
|
—
|
|
|
|
93,948
|
|
CEO
(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vuong Trieu, Ph.D.,
|
|
|
2016
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
former CEO of IThenaPharma
(6)
|
|
|
2015
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
(1)
|
Represents
the aggregate grant date fair value under FASB ASC Topic 718 of options to purchase shares of Marina Biotech common stock.
|
|
|
|
|
(2)
|
Mr.
French resigned as the president and chief executive officer of Marina Biotech, and as a member of the Board of Directors
of Marina Biotech, effective at the close of business on June 10, 2016.
|
|
|
|
|
(3)
|
Mr.
Ramelli served as the interim Chief Executive Officer of Marina Biotech from June 10,
2016 until December 8, 2016, at which time he became Chief Executive Officer. Mr. Ramelli
also served as a non-employee director of Marina Biotech from August 2012 until June
10, 2016, and he continued to serve as a member of the Board of Directors of Marina Biotech
until his resignation therefrom on December 8, 2016. As compensation for his services
as a non-employee director of Marina Biotech during the 2015 fiscal year, Mr. Ramelli
received cash fees in the amount of $45,000, and he was granted on January 6, 2015 options
to purchase up to an aggregate of 38,000 shares of common stock at an exercise price
of $0.635 per share (which options had a grant date fair value under FASB ASC Topic 718
of $40,771). The amounts set forth in the table above represent compensation to Mr. Ramelli
from Marina Biotech both prior to and after Marina Biotech’s merger with IThenaPharma
on November 15, 2016.
|
|
|
|
|
(4)
|
Represents
payments of health insurance premiums for the months of July and August 2016 that were paid to Mr. French pursuant to the
Agreement and Release dated July 22, 2016 between Marina Biotech and Mr. French.
|
|
|
|
|
(5)
|
On
January 4, 2016, Marina Biotech granted to each of its non-employee directors, including Mr. Ramelli (who was serving as a
non-employee director at such time), options to purchase up to an aggregate of 38,000 shares of common stock at an exercise
price of $0.26 per share, which options represented the option grant covering service during the 2016 fiscal year. On November
15, 2016, Marina Biotech granted to Mr. Ramelli, as well as its non-employee directors, options to purchase up to an aggregate
of 35,000 shares of common stock at an exercise price of $0.10 per share.
|
|
|
|
|
(6)
|
Dr.
Trieu served as the President and sole director of IThenaPharma until that entity’s merger with Marina Biotech on November
15, 2016. Dr. Trieu did not receive any compensation directly from IThenaPharma in his capacity as an officer or director
of IThenaPharma prior to the merger. However, IThenaPharma did make payments to Autotelic Inc., of which entity Dr.
Trieu serves as Chairman of the Board of Directors, and which entity owned approximately 9% of the outstanding shares of the
common stock of IThenaPharma immediately prior to the Merger, pursuant to the Master Services Agreement between IThenaPharma
and Autotelic Inc. effective as of January 1, 2015. Please see the section entitled “
Certain Relationships and Related
Party Transactions – Related Party Transactions – Related Party Transactions Involving IThenaPharma
”
above in this Proxy Statement for further information regarding the Master Services Agreement between IThenaPharma and Autotelic
Inc.
|
|
|
|
|
(7)
|
Represents
$60,000 paid to Mr. Ramelli in his capacity as an executive officer of Marina Biotech and $22,500 paid to Mr. Ramelli in his
capacity as a director of Marina Biotech.
|
Narrative
Disclosures Regarding Compensation; Employment Agreements
Marina
Biotech entered into an employment agreement with Mr. French, which was amended and restated on September 15, 2014. We have also
entered into an employment letter with Mr. Ramelli. The terms and conditions of each of the foregoing agreements is summarized
below.
J.
Michael French Employment Agreement
On
June 10, 2008, Marina Biotech entered into an employment agreement (the “Original French Agreement”) with J. Michael
French pursuant to which Mr. French served as the president and CEO of Marina Biotech. The initial term began on June 23, 2008
and ended on June 9, 2011. Thereafter, it continued per its terms on a quarter-to-quarter basis. On September 15, 2014, Marina
Biotech entered into an Amended and Restated Employment Agreement (the “Restated French Agreement”) with Mr. French
pursuant to which Mr. French was to serve as the president and CEO of Marina Biotech until September 14, 2017. On May 31, 2016,
Mr. French resigned as an officer and a director of Marina Biotech, effective June 10, 2016. A copy of the Original French Agreement
was filed as Exhibit 10.2 to Marina Biotech’s Current Report on Form 8-K dated June 10, 2008, and a copy of the Restated
French Agreement was filed as Exhibit 10.1 to Marina Biotech’s Current Report on Form 8-K dated September 15, 2014.
Pursuant
to the Original French Agreement, Mr. French was entitled to annual base compensation of $340,000, which amount was increased
to $425,000 in the Restated French Agreement. He was also eligible to receive annual performance-based incentive cash compensation,
with the targeted amount of such incentive cash compensation being 40% of his annual base compensation for the year under the
Original French Agreement, and 50% of his annual base compensation for the year under the Restated French Agreement, but with
the actual amount to be determined by the Board or the Compensation Committee.
Under
the Original French Agreement, Mr. French was granted options to purchase up to 31,500 shares of Marina Biotech common stock,
of which 10,500 options were exercisable at $50.80 per share, 10,500 options were exercisable at $90.80 per share, and 10,500
options were exercisable at $130.80 per share. The options had a term of 10 years beginning on June 23, 2008. Mr. French agreed
to cancel these options effective as of December 31, 2014. Under the Restated French Agreement, Mr. French was granted ten-year
options to purchase up to 771,000 shares of Marina Biotech common stock at an exercise price of $1.07 per share, of which 257,000
options vested on the first anniversary of the grant date, 257,000 options were to vest monthly in equal installments commencing
after the first anniversary of the grant date and were to vest in full on the second anniversary of the grant date, and 257,000
options were to vest monthly commencing after the second anniversary of the grant date and were to vest in full on the third anniversary
of the grant date.
On
July 22, 2016, following the resignation of Mr. French, Marina Biotech entered into an Agreement and Release (the “Release
Agreement”) with Mr. French. Pursuant to the Release Agreement, Mr. French released Marina Biotech from all claims arising
prior to the date of the Release Agreement. In consideration therefor, Marina Biotech agreed to make the following payments to
Mr. French: (i) wage payments in the amount of $2,000 relating to the payroll period ended June 15, 2016, and reimbursement for
approved expenses in the amount of approximately $21,000 as of June 10, 2016, which payments were previously made; and (ii) payments
of health insurance premiums in the aggregate amount of approximately $5,300 for the months of July and August 2016, to be paid
upon the execution of the Release Agreement.
Marina
Biotech also agreed in the Release Agreement to pay to Mr. French all wages owed to Mr. French through June 10, 2016 in the amount
of approximately $65,000, which payment is to be made within fifteen (15) days of receipt of monies reasonably sufficient to provide
funding for one full year of operations (if ever). As per a settlement agreement between Marina Biotech and Mr. French dated December
1, 2016, Marina Biotech agreed to pay approximately $45,000 of such back wages, following which Marina Biotech had no further
obligation to make any such payments.
In
addition to the foregoing, Marina Biotech agreed in the Release Agreement that any and all options to purchase shares of common
stock held by Mr. French that had not vested as of June 10, 2016 shall vest and become immediately exercisable, and all of such
options (as well as such options held by Mr. French that had already vested as of June 10, 2016) shall remain exercisable until
the earlier of (x) the original termination date of such options and (y) December 31, 2017.
Further,
Marina Biotech waived compliance by Mr. French with the restrictive covenants contained in Section 18 of the Restated French Agreement.
Joseph
Ramelli Offer Letter
On
February 2, 2017, we entered into an employment letter (the “Employment Letter”) with Joseph W. Ramelli, our Chief
Executive Officer. Pursuant to the Employment Letter, Mr. Ramelli shall continue to serve as our Chief Executive Officer pursuant
to the terms and conditions set forth therein. As compensation for such service, Mr. Ramelli will receive a monthly base salary
of $10,000, and he also will be entitled to receive a discretionary bonus as determined by our Board of Directors in its sole
discretion. A copy of the Employment Letter was filed as Exhibit 10.1 to our Current Report on Form 8-K dated February 2, 2017.
In
connection with the Employment Letter, we granted to Mr. Ramelli 100,000 restricted shares of common stock under our 2014 Long-Term
Incentive Plan, with the vesting of such restricted shares to occur upon the first execution and delivery by our company following
the date of the Employment Letter of a definitive agreement involving the licensing by our company of its Smarticles-based liposomal
delivery technology. This vesting condition was satisfied by our entry into a License Agreement with LipoMedics Inc. on February
6, 2017.
In
connection with the Employment Letter, Mr. Ramelli agreed: (i) to a non-solicitation covenant regarding our employees, independent
contractors, customers, vendors and clients; and (ii) not to provide services to certain of our clients, customers or business
partners (and prospective clients, customers and business partners), in each case, during such time as Mr. Ramelli is employed
by our company and for a period of twelve (12) months immediately thereafter.
Outstanding
Equity Awards at Fiscal Year End
2016
Outstanding Equity Awards at Fiscal Year-end Table
The
following table sets forth information regarding the outstanding equity awards held by our Named Executive Officers as of the
end of our 2016 fiscal year:
|
|
Option Awards
|
|
|
Stock Awards
|
|
|
|
Number of
Securities
Underlying
Unexercised
Options
(#)
|
|
|
Number of
Securities
Underlying
Unexercised
Options
(#)
|
|
|
Equity
Incentive
Plan
Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options
|
|
|
Option
Exercise
Price
|
|
|
Option
Expiration
|
|
Number
of
Shares
or
Units
of
Stock
That
Have
Not
Vested
|
|
|
Market
Value of
Shares or
Units of
Stock
That
Have Not
Vested
|
|
|
Equity
Incentive
Plan
Awards:
Number
of
Unearned
Shares,
Units
or Other
Rights
That
Have Not
Vested
|
|
|
Equity
Incentive
Plan
Awards:
Market
or Payout
Value of
Unearned
Shares,
Units or
Other
Rights
That
Have Not
Vested
|
|
Name (1)
|
|
Exercisable
|
|
|
Unexercisable
|
|
|
(#)
|
|
|
($)
|
|
|
Date
|
|
(#)
|
|
|
($)
|
|
|
(#)
|
|
|
($)
|
|
J. Michael French
|
|
|
771,000
|
|
|
|
—
|
|
|
|
—
|
|
|
$
|
1.07
|
|
|
12/31/17
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Joseph W. Ramelli
|
|
|
35,000
|
|
|
|
—
|
|
|
|
—
|
|
|
$
|
0.10
|
|
|
11/15/21
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
38,000
|
|
|
|
—
|
|
|
|
—
|
|
|
$
|
0.26
|
|
|
1/4/21
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
38,000
|
|
|
|
—
|
|
|
|
—
|
|
|
$
|
0.635
|
|
|
1/6/20
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
62,000
|
|
|
|
—
|
|
|
|
—
|
|
|
$
|
1.07
|
|
|
9/15/19
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
(1)
|
Dr.
Trieu did not hold options to purchase shares of our common stock as of the end of our 2016 fiscal year.
|
Option
re-pricings
We
have not engaged in any option re-pricings or other modifications to any of our outstanding equity awards to our Named Executive
Officers during fiscal year 2016.
Compensation
of Directors
2016
Director Compensation Table
The
following Director Compensation table sets forth information concerning compensation for services rendered by our independent
directors for fiscal year 2016.
Name
|
|
Fees Earned
or
Paid in Cash
($)
(4)
|
|
|
Stock
Awards
($)
|
|
|
Option
Awards
($)
(1)
|
|
|
All Other
Compensation
($)
|
|
|
Total
($)
|
|
Stefan C. Loren, Ph.D. (3)
|
|
$
|
45,000
|
|
|
|
—
|
|
|
$
|
11,448
|
|
|
|
—
|
|
|
$
|
56,448
|
|
Philip C. Ranker (3)
|
|
|
45,000
|
|
|
|
—
|
|
|
|
11,448
|
|
|
|
—
|
|
|
|
56,448
|
|
Vuong Trieu (2)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Joseph W. Ramelli (3)(5)
|
|
|
22,500
|
|
|
|
|
|
|
|
8,425
|
|
|
|
(4
|
)
|
|
|
30,925
|
|
Donald A. Williams (3)
|
|
|
45,000
|
|
|
|
—
|
|
|
|
11,448
|
|
|
|
|
|
|
|
56,448
|
|
Total
|
|
$
|
157,500
|
|
|
|
—
|
|
|
$
|
42,769
|
|
|
|
—
|
|
|
$
|
200,269
|
|
|
(1)
|
Represents
the aggregate grant date fair value under FASB ASC Topic 718 of options to purchase shares
of Marina Biotech common stock granted during 2016. On January 4, 2016, Marina Biotech
granted to each of its non-employee directors (including Joseph W. Ramelli, who was serving
as a non-employee director at such time) options to purchase up to an aggregate of 38,000
shares of common stock at an exercise price of $0.26 per share, which options represented
the option grant covering service during the 2016 fiscal year. On November 15, 2016,
Marina Biotech also granted to each of the persons that was serving as a non-employee
director at such time options to purchase up to an aggregate of 35,000 shares of common
stock at an exercise price of $0.10 per share.
|
|
(2)
|
Dr.
Trieu served as the sole member of the Board of Directors, and as the President, of IThenaPharma until that entity’s
merger with Marina Biotech in November 2016. Dr. Trieu did not receive any compensation for his service as a member of the
Board of Directors of IThenaPharma during 2016. Information with respect to his compensation as an officer of IThenaPharma
is reflected in the Summary Compensation Table above. Dr. Trieu became a director of Marina Biotech on November 15, 2016 as
a result of the Merger.
|
|
|
|
|
(3)
|
Each
of Dr. Loren, Mr. Ranker and Mr. Williams served as a member of the Board of Directors of Marina Biotech through the entirety
of 2016. Mr. Ramelli served as a member of the Board of Directors of Marina Biotech until his resignation on December 8, 2016.
|
|
|
|
|
(4)
|
Represents
payments made to Mr. Ramelli, and payments accrued with respect to Dr. Loren, Mr. Ranker and Mr. Williams.
|
|
|
|
|
(5)
|
The
table above reflects only the compensation that was paid to Mr. Ramelli, who served as
a director of Marina Biotech until his resignation as a director on December 8, 2016,
and as an executive officer of Marina Biotech beginning on June 10, 2016, prior to the
date on which he became an executive officer of Marina Biotech (i.e., June 10, 2016)
and in his capacity as a non-employee director of Marina Biotech. Such compensation to
Mr. Ramelli as a non-employee director of Marina Biotech, as well as any other compensation
paid to Mr. Ramelli in his capacity as an executive officer of Marina Biotech (both prior
to and following the merger with IThenaPharma), including, without limitation, the grant
to Mr. Ramelli of options to purchase up to an aggregate of 35,000 shares of common stock
at an exercise price of $0.10 per share on November 15, 2016, is also reflected in the
Summary Compensation Table above.
|
As
of December 31, 2016, Dr. Loren, Mr. Williams and Mr. Ramelli each held options to purchase up to 173,000 shares of our common
stock, Mr. Ranker held options to purchase up to 175,500 shares of our common stock and Dr. Trieu held options to purchase no
shares of our common stock.
J.
Michael French, who served as a director and as an executive officer of Marina Biotech until his resignation effective June 10,
2016, has not been included in the Director Compensation Table because he is a Named Executive Officer and did not receive any
additional compensation for services provided as a director.
Director
Compensation Program
: Marina Biotech’s compensation program for non-employee directors for the 2016 fiscal year consisted
of (and for the 2017 fiscal year will consist of): (i) a one-time on-boarding grant of 5-year options to purchase up to 43,000
shares of common stock, which options shall vest 50% immediately and 50% after one year; (ii) an annual grant of 5-year options
to purchase up to 38,000 shares of common stock, which options vest 50% immediately and 50% after one year; and (iii) an annual
cash payment of $45,000 per year, payable quarterly. In addition, on November 15, 2016 Marina Biotech granted to each of the persons
that was serving as a non-employee director of Marina Biotech at such time options to purchase up to 35,000 shares of common stock
at an exercise price of $0.10 per share, and on January 3, 2017 Marina Biotech granted to each person that was serving as a director
at such time options to purchase up to 43,000 shares of common stock at an exercise price of $0.17 per share (in addition to the
annual option grant for the 2017 fiscal year).
Equity
Compensation Plan Information
The
following table provides aggregate information as of the end of the 2016 fiscal year with respect to all of the compensation plans
under which our common stock is authorized for issuance, including our 2004 Stock Incentive Plan, our 2008 Stock Incentive Plan
and our 2014 Long-Term Incentive Plan:
|
|
|
|
|
|
|
|
Number of Securities
|
|
|
|
|
|
|
|
|
|
Remaining Available for
|
|
|
|
|
|
|
|
|
|
Future Issuance Under Equity
|
|
|
|
Number of Securities to be
|
|
|
|
|
|
Compensation Plans
|
|
|
|
Issued Upon Exercise of
|
|
|
Weighted-Average Exercise Price of
|
|
|
(Excluding Securities
|
|
|
|
Outstanding Options
|
|
|
Outstanding Options
|
|
|
Reflected in Column(a))
|
|
Equity compensation plans approved by security holders
|
|
|
1,688,106
|
(1)
|
|
|
4.00
|
|
|
|
7,808,519
|
|
Total
|
|
|
1,688,106
|
|
|
|
4.00
|
|
|
|
7,808,519
|
|
|
(1)
|
Consists
of: (i) 106 shares of common stock underlying awards made pursuant to our 2004 Stock Incentive Plan, (ii) 45,000 shares of
common stock underlying awards made pursuant to our 2008 Stock Incentive Plan and (iii) 1,643,000 shares of common stock underlying
awards made pursuant to our 2014 Long-Term Incentive Plan.
|
SUBMISSION
OF STOCKHOLDER PROPOSALS
We
intend to hold our 2018 annual meeting of stockholders (the “2016 Annual Meeting”) in May 2018. To be considered for
inclusion in our notice of annual meeting and proxy statement for, and for presentation at, the 2018 Annual Meeting, a stockholder
proposal must be received by the Corporate Secretary, Marina Biotech, Inc., 17870 Castleton Street, Suite 250, City of Industry,
California 91748, no later than December 25, 2017, and must otherwise comply with applicable rules and regulations of the SEC,
including Rule 14a-8 of Regulation 14A under the Exchange Act.
Our
Bylaws require advance notice of any proposal by a stockholder intended to be presented at an annual meeting that is not included
in our notice of annual meeting and proxy statement because it was not timely submitted under the preceding paragraph, or made
by or at the direction of any member of the Board of Directors, including any proposal for the nomination for election as a director.
To be considered for such presentation at the 2018 Annual Meeting, any such stockholder proposal must be received by the Corporate
Secretary, Marina Biotech, Inc., no earlier than _______, 2018 and no later than _______, 2018, provided, that if the 2018 Annual
Meeting is scheduled to be held on a date more than 30 days before the anniversary date of the 2017 annual meeting of stockholders
or more than 60 days after the anniversary date of the 2017 annual meeting of stockholders, a stockholder’s proposal shall
be timely if delivered to, or mailed to and received by, our company not later than the close of business on the later of (A)
the 75
th
day prior to the scheduled date of the 2018 Annual Meeting, or (B) the 15
th
day following the day
on which public announcement of the date of the 2018 Annual Meeting is first made by us, and in any case discretionary authority
may be used if such proposal is untimely submitted.
SECTION
16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section
16(a) of the Securities Exchange Act of 1934, as amended, requires our executive officers and directors, and persons who own more
than 10% of a registered class of our equity securities (“Reporting Persons”), to file reports of ownership and changes
in ownership with the SEC and with NASDAQ. Based solely on our review of the reports filed by Reporting Persons, and written representations
from certain Reporting Persons that no other reports were required for those persons, we believe that, during the year ended December
31, 2016, the Reporting Persons met all applicable Section 16(a) filing requirements.
OTHER
MATTERS
We
will furnish without charge to each person whose proxy is being solicited, upon the written request of any such person, a copy
of our Annual Report on Form 10-K for the fiscal year ended December 31, 2016, as filed with the SEC, including the financial
statements. Requests for copies of such Annual Report on Form 10-K should be directed to Joseph W. Ramelli, chief Executive Officer,
Marina Biotech, Inc., 17870 Castleton Street, Suite 250, City of Industry, California 91748.
Our
Board of Directors does not know of any other matters that are to be presented for action at the Annual Meeting. If any other
matters are properly brought before the Annual Meeting or any adjournments thereof, the persons named in the enclosed proxy will
have the discretionary authority to vote all proxies received with respect to such matters in accordance with their best judgment.
It
is important that the proxies be returned promptly and that your shares are represented at the Annual Meeting. Stockholders are
urged to mark, date, execute and promptly return the accompanying proxy card in the enclosed envelope.
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By
order of the Board of Directors,
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/s/
Joseph W. Ramelli
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Joseph
W. Ramelli
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Chief
Executive Officer
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April
__, 2017
City
of Industry, CA