Item
5.02 - Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements
of Certain Officers.
Executive
Compensation
On
July 28, 2022, the Board of Directors (the “Board”) of Oncocyte Corporation (the “Company” or “Oncocyte”)
adopted compensation programs for the Company’s Senior Vice President, Finance, and Interim Chief Financial Officer Anish John,
Chief Operating Officer Gisela Paulsen, and Chief Scientific Officer Douglas Ross. The Board also approved a modification to certain
performance goals, the level of achievement of which will determine the amount of the 2022 annual bonus award (the “2022 Bonus”)
to be received by the Company’s Chief Executive Officer Ronald Andrews.
CFO
Salary, Relocation and Time-Based Option Grant
Effective
August 8, 2022, Anish John, the Company’s Senior Vice President, Finance, and Interim Chief Financial Officer, will receive an
annual salary of $330,000 and will be eligible to receive discretionary annual bonuses based on achievement of personal and corporate
performance goals established by Oncocyte, with a target bonus equal to 50% of his annual base salary. Mr. John will also be eligible
for reimbursement for up to $25,000 in relocation expenses.
On
August 15, 2022, Mr. John will receive a one-time award of 100,000 stock options under the Oncocyte 2018 Equity Incentive Plan (the “Plan”).
The options will vest and thereby become exercisable as follows: twenty-five percent of the options will vest upon completion of one
year of continuous service as an employee, and the balance of the options will vest in 36 equal monthly installments, commencing on the
first anniversary of the effective date of the grant, subject to continued service as an employee on the applicable vesting date. The
exercise price of the stock options will be the fair market value of Oncocyte common stock determined in accordance with the Plan. The
options will expire if not exercised within ten years from the date of grant, subject to earlier termination in the event of the termination
of his employment. The options will be incentive stock options pursuant to Section 422 of the Internal Revenue Code (the “Code”),
to the extent permitted by the Code. The options will be subject to the terms and conditions of a stock option agreement, the Plan, the
Oncocyte Change in Control and Severance Plan, and any applicable provisions of his employment agreement.
COO
Salary, Relocation and Time-Based RSU Grant
Effective
August 8, 2022, Gisela Paulsen, the Company’s Chief Operating Officer, will receive an annual salary of $415,000 and will be eligible
to receive discretionary annual bonuses based on achievement of personal and corporate performance goals established by Oncocyte, with
a target bonus equal to 60% of her annual base salary.
On
August 15, 2022, Ms. Paulsen will receive a one-time award of 175,000 restricted stock units (“RSUs”) under the Plan. One
hundred percent of the RSUs will vest on August 15, 2023, subject to continuous service.
Long-Term
Incentive RSU Grant to CFO, COO and CSO
On
August 15, 2022, each of Mr. John, Ms. Paulsen and Dr. Ross will receive equity awards as shown in the following table.
| Name
of Executive |
|
Office |
|
Number
of
Restricted
Stock Units |
|
| Anish
John |
|
Senior
Vice President, Finance, and Interim Chief Financial Officer |
|
|
150,000 |
|
| Gisela
Paulsen |
|
Chief
Operating Officer |
|
|
350,000 |
|
| Douglas
Ross |
|
Chief
Scientific Officer |
|
|
150,000 |
|
The
RSUs to be granted to each of the executives are to be granted under the Plan. One hundred percent of the RSUs will vest on January 1,
2024 based on the achievement of a pre-determined financial objective related to the Company’s available cash.
CEO
Bonus Award Modifications
On
July 28, 2022, the Board approved a modification to the performance objectives of Mr. Andrews’ 2022 Bonus such that the corporate
budget objective, which required Oncocyte to achieve pre-established budget targets whereby the Company’s actual expenses do not
exceed budgeted expenses in fiscal 2022 by certain specified percentages, was changed from an expense-related objective to a cash-related
objective. A description of the 2022 Bonus was previously provided in a Current Report on Form 8-K filed with the
Securities and Exchange Commission on March 14, 2022.