Item
5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements
of Certain Officers.
Appointment
of New Director
On
September 5, 2018, upon the recommendation of the Nominating and Corporate Governance Committee of Matinas BioPharma Holdings,
Inc. (the “Company” or “Matinas”), the Board of Directors of Matinas increased the size of the board to
seven members and appointed Patrick G. LePore, age 63, effective immediately, to fill the newly created director position. Mr.
LePore will hold this position until the next annual meeting of the Company’s shareholders or until his successor is elected
and qualified, subject to his earlier resignation or removal. Mr. LePore has also been appointed to serve as Vice Chairman of
the Board and as a member of the Company’s Compensation Committee and Nominating and Corporate Governance Committee.
Mr.
LePore served as chairman, chief executive officer and president of Par Pharmaceuticals, Inc. (NYSE:PRX) from September 2006 until
the company’s acquisition by private equity investor TPG in November 2012. He remained as chairman of the new company where
he led the sale of the company to Endo Pharmaceuticals (NASDAQ: ENDP). Mr. LePore began his career with Hoffmann LaRoche. Later,
he founded Boron LePore and Associates, a medical communications company, which he took public in 1997 and which was eventually
sold to Cardinal Health. He is a member of the board of directors of Lannett Company, Inc. (NYSE: LCI) and is a trustee of Villanova
University. He previously served as a member of the board of directors of PharMerica Corporation (NYSE: PMC) and Innoviva, Inc.
(NASDAQ: INVA). Mr. LePore earned his bachelor’s degree from Villanova University and Master of Business Administration
from Fairleigh Dickinson University.
Mr.
LePore will participate in the Company’s standard non-employee director compensation policy. The policy provides for the
following compensation amounts payable in cash, or upon election by such non-employee director, in shares of unrestricted common
stock: (i) each non-employee director is entitled to receive an annual fee of $50,000, (ii) the chairman of the board is entitled
to receive an additional annual fee of $25,000, (iii) the vice chairman of the board is entitled to receive an additional annual
fee of $20,000, (iv) the chair of our audit committee is entitled to receive an annual fee from us of $15,000 and other members
of our audit committee are entitled to receive $7,500; (v) the chair of our compensation committee is entitled to receive an annual
fee from us of $12,000 and other members of our compensation committee are entitled to receive $6,000; and (vi) the chair of our
nominating and corporate governance committee is entitled to receive an annual fee from us of $7,500 and other members are entitled
to receive $4,000. Upon joining the Board Mr. LePore will receive an initial option grant to purchase 150,000 shares, which shall
vest over three years. In addition, as of the date of each annual meeting of the shareholders, each non-employee director will
receive an option grant to purchase of our common stock valued at $80,000 as determined by the Black Scholes method on the date
of grant under our existing equity incentive plan, or any other equity incentive plan we may adopt in the future, which shall
vest in twelve equal monthly installments.
The
Company will enter into an indemnification agreement with Mr. LePore (the “Indemnification Agreement”), in the Company’s
standard form which has been previously entered into by the Company with its directors and executive officers.
Departure
of Certain Officers
On
September 5, 2018, Gary Gaglione, the Company’s acting chief financial officer, notified the Board that he planned to retire
effective September 30, 2018. In connection with Mr. Gaglione’s retirement, Mr. Gaglione will be provided with an extension
through two years after termination date of the exercise period for his vested stock options. The Board of Directors of Matinas
wishes to express its gratitude and sincere appreciation to Mr. Gaglione for the dedication and guidance he has provided to Matinas
over the years.