Predictive Oncology Inc

This section describes the material elements of the compensation awarded to, earned by or paid to (i) each individual who served as our principal executive officer during 2023, (ii) our two most highly compensated other executive officers who were serving as executive officers at the end of 2023 and who received more than $100,000 in the form of salary and bonus during such year, and (iii) up to two additional individuals for whom disclosure would have been provided pursuant to (ii) above but for the fact that the individual was not serving as an executive officer at the end of 2023. We refer to these individuals as our “Named Executive Officers.” Our named executive officers are:

We did not have any other executive officers, as determined in accordance with SEC rules, during 2023.

Summary Compensation Table for Fiscal 2023 and 2022

The following table provides information regarding the compensation awarded to or earned by each of the Named Executive Officers during the fiscal years ended December 31, 2023 and December 31, 2022:

Outstanding Equity Awards at Fiscal Year-end for Fiscal 2023

The following table sets forth certain information regarding outstanding equity awards held by the named executive officers as of December 31, 2023:

Executive Compensation Components for Fiscal 2023

*Base Salary.*Base salary is an important element of our executive compensation program as it provides executives with a fixed, regular, non-contingent earnings stream to support annual living and other expenses. As a component of total compensation, we generally set base salaries at levels believed to attract and retain an experienced management team that will successfully grow our business and create stockholder value. We also utilize base salaries to reward individual performance and contributions to our overall business objectives but seek to do so in a manner that does not detract from the executives’ incentive to realize additional compensation through our bonus and equity incentive programs.

The Compensation Committee reviews the Chief Executive Officer’s salary at least annually. The Compensation Committee may recommend adjustments to the Chief Executive Officer’s base salary based upon the Compensation Committee’s review of his current base salary, incentive cash compensation and equity-based compensation, as well as his performance and comparative market data. The Compensation Committee also reviews other executives’ salaries throughout the year, with input from the Chief Executive Officer. The Compensation Committee may recommend adjustments to other executives’ base salary based upon the Chief Executive Officer’s recommendation and the reviewed executives’ responsibilities, experience, and performance, as well as comparative market data.

In utilizing comparative data, the Compensation Committee seeks to recommend salaries for each executive at a level that is appropriate after giving consideration to experience for the relevant position and the executive’s performance. The Compensation Committee reviews performance for both our Company (based upon achievement of strategic initiatives) and each individual executive. Based upon these factors, the Compensation Committee may recommend adjustments to base salaries to better align individual compensation with comparative market compensation, to provide merit-based increases based upon individual or company achievement, or to account for changes in roles and responsibilities.

*Bonuses.*Bonuses may be paid at the discretion of the Compensation Committee and as approved by the Board of Directors based on the Compensation Committee’s determination of the performance of the executive officer.

*Stock Options and Other Equity Grants.*Consistent with our compensation philosophies related to performance-based compensation, long-term stockholder value creation and alignment of executive interests with those of stockholders, we may make periodic grants of long-term incentive compensation in the form of stock options or other equity-based incentive award to our executive officers, directors, and others in the organization.

Stock options provide executive officers, directors, and other employees with the opportunity to purchase common stock at a price fixed on the grant date regardless of future market price. A stock option becomes valuable only if the common stock price increases above the option exercise price and the holder of the option remains employed or appointed during the period required for the option shares to vest. This provides an incentive for an option holder to remain employed or appointed by us. In addition, stock options link employees’ compensation to stockholders’ interests by providing an incentive to increase stockholder value. Under our Amended and Restated 2012 Stock Incentive Plan (the “2012 Plan”), we may also make grants of common stock, restricted stock awards, restricted stock units, performance stock awards, and stock appreciation rights to executive officers, directors, and other employees. Restricted stock units represent the right to receive shares of our common stock (or, in some cases, the value thereof in cash) upon vesting, with vesting generally being time-based, based on achievement of certain perform metrics, or both. We adopted the 2012 Plan to give us flexibility in the types of awards that we could grant to our executive officers, directors, and other employees. In 2020, 2021, and 2022, our stockholders approved amendments to the 2012 Plan to increase the share reserve under the 2012 Plan by 37,500 shares, 75,000 shares, and 125,000 shares, respectively. As of December 31, 2023, there were stock options to purchase 47,664 shares of common stock outstanding under the 2012 Plan and 94,878 shares remain available for future equity awards.

*Limited Perquisites; Other Benefits.*We provide our employees, including our executive officers, with a full complement of employee benefits, including health and dental insurance, short term and long-term disability insurance, life insurance, a 401(k) plan, FSA flex plan and Section 125 plan.

Long Term Incentive Plan for Executive Officers

On May 17, 2021, the Committee adopted and approved a 2021 Long Term Incentive Plan (the “LTIP”) to provide incentives to the Company’s executive officers over the three-year performance period consisting of fiscal years 2021, 2022 and 2023. Under the LTIP, in May 2021, the Company granted restricted stock units (“RSUs”) to the Company’s then-current CFO, Bob Myers, under the 2012 Plan.

The LTIP awards consisted of 7,500 RSUs (target). These RSUs required continued employment of the executive through January 1, 2024, and therefore were terminated before vesting as a result of Mr. Myers’ departure from the Company in 2023.

Employment Contracts

Employment Agreement with Current Chief Executive Officer

On October 13, 2022, the Company and Raymond F. Vennare, the Company’s current Chief Executive Officer, entered into an Employment Agreement (the “Agreement”), effective as of November 1, 2022, the first date of Mr. Vennare’s employment. Pursuant to the Agreement, Mr. Vennare is entitled to an annual base salary of $525,000. He will also be eligible (i) to receive an annual cash bonus equal to up to 50% of his salary, or at the discretion of the Compensation Committee (the “Committee”) of the Company’s Board of Directors, a higher percentage based on his performance (prorated for 2022) and (ii) to participate in a long-term incentive plan to be adopted and maintained by the Committee. Mr. Vennare will also be eligible to participate in the standard employee benefit plans generally available to executive employees of the Company, and, at the discretion of the Committee, to receive grants of stock options or other equity awards. Any grants of equity awards, including those above, will be made from the Company’s Amended and Restated 2012 Stock Incentive Plan or successor plans.

Under the Agreement, Mr. Vennare’s employment by the Company is at-will. If his employment is terminated by the Company without “cause” or if he voluntarily resigns with “good reason” (in each case as defined in the Agreement), then Mr. Vennare will be entitled to receive from the Company payment of his base salary then in effect through his last date of employment, plus accrued, unused vacation pay. In addition, Mr. Vennare will be entitled to (a) severance pay in an amount equal to 12 months of his base salary then in effect, less applicable taxes and withholdings; and (b) a bonus payment on a pro-rata basis through the date of his termination.

The Agreement also contains customary provisions with respect to confidentiality and intellectual property, in addition to ones prohibiting Mr. Vennare from soliciting the Company’s employees and from engaging in certain activities that are competitive with the Company for a period of 12 months after termination of his employment.

Employment Agreement with former Chief Financial Officer.

Effective September 30, 2023, Mr. Bob Myers resigned as the Chief Financial Officer. Mr. Myers served as Chief Financial Officer since July 1, 2012, under an employment agreement entered on August 13, 2012, which was amended on August 20, 2018. Under the agreement the employment of Mr. Myers was at will.

Mr. Myers’ annual base salary was $345,000 until March 1, 2022, at which time Mr. Myers received an increase in his base salary resulting in an annualized base salary of $380,880. On September 23, 2020, Mr. Myers was awarded a one-time, special interim grant of retention equity awards for 2020 of 5,000 restricted stock units payable in shares of common stock and vesting in equal annual installments over three years, subject to continued employment, with accelerated vesting upon certain events, including involuntary termination without cause, voluntary termination for good reason or retirement after at least eighteen months upon at least six months’ notice. Mr. Myers received an increase in his base salary on March 1, 2023, resulting in an annualized base salary of $430,000. Base salary for Mr. Myers could have been adjusted by us but could not have been reduced except in connection with a reduction imposed on substantially all employees as part of a general reduction. He would have also been eligible to receive an annual incentive bonus for each calendar year at the end of which he remained employed by us, subject to the attainment of certain objectives.

On May 17, 2021, Mr. Myers received 7,500 restricted stock units (target) pursuant to the 2021 Long Term Incentive Plan (the “LTIP”). See “Long Term Incentive Plan for Executive Officers” above. Also, under the long-term incentive program, the officer would receive annual grants of restricted stock units on January 1 of each calendar year starting in 2021. Each grant would consist of 2,500 restricted stock units with vesting of each grant over three years based on performance and continued employment.

Mr. Myers was entitled to five (5) weeks of paid vacation per each calendar year earned ratably over each calendar year, to be taken at such times as employee and Company determined and provided that no vacation time would unreasonably interfere with the duties required to be rendered by employee.

Under the agreement, if his employment was terminated without “cause” or if he terminated his employment for “good reason,” in each case as defined in his employment agreement, he would be entitled to receive severance pay in an amount equal to twelve months of base salary, less applicable taxes and withholdings. In that event, he would receive a bonus payment on a pro-rata basis through the date of termination and any accrued, unused vacation pay. The severance pay, bonus payment, and other consideration were conditioned upon the executive’s execution of a full and final release of liability. Mr. Myers left the Company in September 2023, and the Company and Mr. Myers entered into a Separation Agreement and Mutual Release on September 30, 2023, that restated the severance payments he was entitled to pursuant to his agreement, provided for the release of liability described above, and in which the Company limited the non-compete provision of the employment agreement to provide that it would only apply to activities related to the discovery, characterization, or evaluation of chemical or biological compositions for the diagnosis or treatment of disease.

Potential Payments Upon Termination or Change of Control

Most of our stock option agreements provide for an acceleration of vesting in the event of a change in control as defined in the agreements and in the 2012 Plan. However, the stock option agreements awarded to Bob Myers provided that upon the termination of his employment without cause or for good reason, his options would become fully vested, and the vested shares may be purchased for up to five years after such termination (or such lesser period for the option if the remaining period of the option was less than five years after such termination). In addition, in the event of such employee’s retirement, death or disability, such employee’s options would become fully vested, and the vested shares may be purchased for the entire remaining period of the option. Also, see “Employment Contracts” above for a description of certain severance compensation arrangements.

Director Compensation

Effective June 17, 2021 the Board adopted a Director Compensation Program under which the members of the Board of Directors receive quarterly awards of common stock and cash as compensation for their services as directors and annual awards of common stock and cash for services as committee members. These awards were implemented to replace a previous program of quarterly stock option grants to directors. The June 2020 annual common stock award remains in place as described below.

The compensation program pays all of the compensation in the form of stock and cash awards (with the cash component payable in additional shares at the election of the director. The cash component is equal to 28% of the total value of the award (or 38.9% of the share component of the award), intended to pay the tax on the full award.

Each director receives a quarterly award of $8,333 payable on the last day of the quarter, consisting of (i) shares with a value of $6,000 and (ii) $2,333 in cash (or additional shares).

For each board committee, each director receives an additional annual award of $11,112, consisting of (i) shares with a value of $8,000 and (ii) $3,112 in cash (or additional shares), payable on December 31.

Starting in 2022, director compensation became limited to Non-Employee Directors (directors who are not employees of Predictive Oncology or any subsidiary and who do not receive regular long-term cash compensation as consultants).

Effective as of January 25, 2023, under an Amended and Restated Director Compensation Program, the Lead Independent Director, will also receive an annual award of $11,112, consisting of (i) shares with a value of $8,000 and (ii) $3,112 in cash (or additional shares).

Effective on June 16, 2020, the Board instituted an annual common stock award for all the directors under which they will receive $7,000 in value of newly issued shares of common stock, par value $0.01 per year annually for three years, if they are serving as a director at the annual appointment date. Additionally, the directors will receive a $3,000 cash payment per year annually for three years, if they are serving as a director at the annual appointment date.

Director Compensation Table for Fiscal 2023

The following table summarizes the compensation paid to each individual who served as a director during the fiscal year ended December 31, 2023: