If you are entitled to a paymentpreparing the compensation committee report that the SEC requires in lieuour annual proxy statement, as applicable;
recommending the compensation of any fractional share interest, a check will be mailed to you at your registered address as soon as practicable after VirnetX’s transfer agent completes the aggregation and sale described above in “Treatment of Fractional Shares.” By signing and cashing this check, you will warrant that you owned the shares for which you receive a cash payment.
The par value per share of the common stock would remain unchanged at $0.0001 per share after the reverse stock split. As a result, on the Effective Date, the par value per share on VirnetX’s balance sheet attributablenon-employee directors to the common stock will be reduced proportionally from its present amount, andBoard;
making regular reports to the additional paid in capital account shall be credited with the amount by which the par value per share is reduced. The per share common stock net income or loss and net book value will be increased because there will be fewer shares of common stock outstanding. VirnetX does not anticipate that any other accounting consequences would arise as a result of the reverse stock split.
Stockholders are not entitled to appraisal rights under Delaware lawBoard with respect to significant actions and determinations made by the proposed Charter Amendment to effectcompensation committee; and
approving the reverse stock split.
Material U.S. Federal Income Tax Consequencescreation or revision of the
Reverse Stock SplitCompany’s compensation recovery policy (“Clawback Policy”).The following discussion is a summary of certain material U.S. federal income tax consequencesOur Chief Executive Officer generally attends compensation committee meetings and makes recommendations to our compensation committee regarding the amount and form of the reverse stock split. This discussion is included for general information purposes only and does not purport to address all aspects of U.S. federal income tax law that may be relevant to stockholders in light of their particular circumstances. Further, this discussion does not address any state, local or non-U.S. tax consequencescompensation of the reverse stock split. This discussionother executive officers and key employees. He is based on the Internal Revenue Code of 1986, as amended (the “Code”), and current Treasury Regulations, court decisions and published rulings and administrative pronouncementsnot present for any of the Internal Revenue Service (the “IRS”) in effect as of the date of this proxy statement, all of which are subject to change, possibly on a retroactive basis, andexecutive sessions or for any such change could affect the continuing validity of this discussion. We have not sought, and will not seek, any ruling from the IRS or an opinion of tax counseldecisions regarding his own compensation.
Except with respect to determining the matters discussed herein. The discussion below regardingChief Executive Officer’s compensation, the U.S. federal income tax consequencescompensation committee may delegate its authority to a subcommittee thereof and, to the extent permitted by applicable law, the compensation committee may delegate to officers or appropriate supervisory personnel the authority to grant stock awards to non-executive, non-director employees.
A more detailed description of our compensation committee’s functions can be found in our compensation committee charter at https://ir.virnetx.com/ under the “Investors” tab in the “Corporate Governance” subcategory, or by writing to us at VirnetX Holding Corporation, P.O. Box 439, Zephyr Cove, Nevada 89448 (Attention: Investor Relations).
Compensation Committee Interlocks and Insider Participation
In 2023, Messrs. Angelo, Feiner and O’Brien served as members of our compensation committee. No member of our compensation committee was an officer or employee of VirnetX in 2023. In addition, no member of our compensation committee or executive officer of the reverse stock split isCompany served as a member of the Board or compensation committee of any entity that has an executive officer serving as a member of the Board or our compensation committee.
Communications with the Board Any of our stockholders and other interested parties who wish to communicate with the Board, a committee of the Board, the non-management directors as a group, or any individual member of the Board, may send correspondence to our Corporate Secretary at VirnetX Holding Corporation, P.O. Box 439, Zephyr Cove, Nevada 89448.
Our Corporate Secretary will compile and submit on a periodic basis all stockholder correspondence to our entire Board, or, if and as designated in the communication, to a committee of the Board, our non-management directors as a group, or an individual Board member. The independent directors of the Board review and approve the stockholders’ communications process periodically to ensure effective communication with stockholders.
Directors who are also our employees are not bindingcompensated for serving on the IRSBoard. Information regarding compensation otherwise received by our directors who are also named executive officers is provided under the heading “Executive Compensation and Other Matters.”
Our compensation committee periodically reviews director compensation in consultation with its independent compensation consultant, Compensia, Inc., or Compensia. Any recommendations for changes are made to our full Board by our compensation committee. Our compensation committee last reviewed our director compensation program with Compensia in November 2023 and determined that the courts.
All stockholders are urgedprogram should be updated to consult with their own tax advisors with respectremain competitive. In November 2023, we made certain changes to the tax consequences of the reverse stock split. This summary assumes that the pre-reverse stock split shares were, and the post-reverse stock split shares will be, heldcompensation as a “capital asset,” as defined in Section 1221 of the Code. This discussion does not address all U.S. federal income tax consequences relevant to the particular circumstances of a stockholder. In addition, it does not address the tax consequences to stockholders who are subject to special tax rules, including:
persons subject to the alternative minimum tax or Medicare contribution tax on net investment income;
persons whose functional currency is not the U.S. dollar;
persons holding our common stock as part of a hedge, straddle, or other risk reduction strategy or as part of a conversion transaction or other integrated investment;
persons who are former U.S. citizens or long-term residents;
persons who are not U.S. holders;
banks, insurance companies, and other financial institutions;
mutual funds, real estate investment trusts or regulated investment companies;
brokers, dealers, or traders in securities;
partnerships, other entities or arrangements treated as partnerships for U.S. federal income tax purposes, and other pass-through entities (and investors therein);
tax-exempt organizations or governmental organizations;
persons deemed to sell our common stock under the constructive sale provisions of the Code;
persons who hold or receive our common stock pursuant to the exercise of any employee stock options or otherwise as compensation;reflected below.