Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

Discretionary 2012 Annual Incentive Bonus

At a meeting of the Compensation Committee (the "Compensation Committee") of the Board of Directors of VirnetX Holding Corporation (the "Company") held on December 17, 2012, the Compensation Committee reviewed the Company's performance in 2012 and the contributions that Kendall Larsen, the Company's Chief Executive Officer, President and Chairman, and Richard Nance, the Company's Chief Financial Officer, made to such performance. Following this review, the Compensation Committee exercised its discretion in determining to pay Mr. Larsen 150% of his 2012 target bonus and to pay Mr. Nance 100% of his 2012 target bonus, in light of the Company's overall strong performance for the year and their respective contributions in achieving this performance. The 2012 target bonus for each of Messrs. Larsen and Nance previously approved by the Compensation Committee was equal to 50% of Mr. Larsen's and Mr. Nance's respective base salary. Accordingly, the Compensation Committee determined to award Mr. Larsen a cash bonus for 2012 equal to $346,500 and Mr. Nance a cash bonus for 2012 equal to $30,000.

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