DEF 14A of Zevra Therapeutics, Inc., Apr 3, 2024

DEF 14A of Zevra Therapeutics, Inc.

Filed Apr 3, 2024 · FY20230001437749-24-010874

Open on EDGAR

  1. ELECTION OF DIRECTORS

    ELECTION OF DIRECTORS Our Board is divided into three classes. Each class consists, as nearly as possible, of one-third of the total number of directors, and each class has a three-year term. Vacancies on the Board may be filled only by persons elected by a majority of the remaining directors. A director elected by the Board to fill a vacancy in a class, including vacancies created by an increase in the number of directors, shall serve for the remainder of the full term of that class and until the director’s successor is duly elected and qualified. The Board presently has eight members. The current class structure is as follows: Class III, whose current term will expire at the Annual Meeting and, if elected at the Annual Meeting, whose subsequent term will expire at the 2027 annual meeting of stockholders; Class I, whose term will expire at the 2025 annual meeting of stockholders; and Class II, whose term will expire at the 2026 annual meeting of stockholders. The current Class III directors are Thomas D. Anderson, Neil F. McFarlane and Alvin Shih, M.D.; the current Class I directors are Tamara A. Favorito and Wendy Dixon, Ph.D.; and the current Class II directors are John B. Bode, Douglas W. Calder, and Corey Watton. Each of the nominees listed below is currently a Class III director of the Company. Mr. Anderson and Dr. Shih were recommended to serve as directors by a third-party search firm and were appointed to the Board in August 2023 and January 2024, respectively. Mr. McFarlane became a director in October 2023, at the time that he was appointed as the Company's President and Chief Executive Officer. If elected at the Annual Meeting, each of these nominees would serve until the 2027 annual meeting of our stockholders and until his successor has been duly elected and qualified, or, if sooner, until the director’s death, resignation or removal. It is our policy to encourage directors and nominees for director to attend the Annual Meeting. Tamara A. Favorito is the only incumbent directors who attended the 2023 annual meeting of our stockholders. Shares represented by executed proxies will be voted, if authority to do so is not withheld, for the election of the three nominees named below. If any nominee becomes unable to serve or for good cause will not serve as a director, shares that would have been voted for that nominee may instead be voted for the election of a substitute nominee proposed by our Board. Each person nominated for election has agreed to serve if elected. Our management has no reason to believe that any nominee would be unable to serve.

  2. NOMINEES FOR ELECTION AS A CLASS III DIRECTOR FOR A THREE-YEAR TERM EXPIRING AT THE 2027 ANNUAL MEETING

    NOMINEES FOR ELECTION AS A CLASS III DIRECTOR FOR A THREE-YEAR TERM EXPIRING AT THE 2027 ANNUAL MEETING

  3. Thomas D. Anderson

    Thomas D. Anderson Thomas D. Anderson has served as a director of our Company since August 2023. Mr. Anderson is a 35-year veteran of the biopharma industry and has led and been a part of high-growth organizations for much of his career. Mr. Anderson has served as chief executive officer and director of SwanBio Therapeutics since September 2019 until semi-retirement in October 2023, and subsequently resigned his board directorship in March 2024. Prior to that, he served as the chief commercial strategy officer of Sage Therapeutics, Inc. from 2014 to 2018. Between 2004 and 2014, Mr. Anderson was a senior operating executive with Shire Pharmaceuticals Group in a number of operational and strategic roles in both rare diseases and specialty pharmaceuticals. Prior to Shire, he spent 17 years at Johnson & Johnson's pharmaceutical companies, McNeil and Janssen, in various business capacities. Mr. Anderson is also an investor partner at Robin Hood Ventures in Philadelphia, Pennsylvania. Mr. Anderson earned his MBA from the University of Notre Dame’s Mendoza College of Business Administration. He received his BS in civil engineering from the P.C. Rossin College of Engineering at Lehigh University. Our Board believes that Mr. Anderson’s significant leadership experience in the biotechnology industry and his experience in rare disease qualifies him to serve on the Board.

  4. Neil F. McFarlane

    Neil F. McFarlane Neil F. McFarlane has served as our president, chief executive officer, and a director of our Company since October 2023. Mr. McFarlane has served as a member of the board of directors of Collegium Pharmaceutical Inc. since April 2022. Previously, Mr. McFarlane served as the chief executive officer and a member of the board of directors of Adamas Pharmaceuticals, Inc. from September 2019 until its acquisition by Supernus Pharmaceuticals, Inc. in November 2021. Mr. McFarlane worked as an independent consultant between June 2019 and August 2019 and again between December 2021 and September 2023 providing consulting services for biotechnology, pharmaceutical, and financial services companies. From August 2016 to May 2019, Mr. McFarlane served as the chief operating officer of Retrophin, Inc., now known as Travere Therapeutics, Inc., where he was responsible for overseeing operations. From 2011 to 2016 Mr. McFarlane served as vice president and general manager of UCB, Inc.'s U.S. Immunology Business Unit and as vice president for its Global Bone Business Unit in collaboration with Amgen Inc. Prior to his positions at UCB, Mr. McFarlane held positions of increasing responsibility with Genzyme Corporation (“Genzyme”) and Sangstat Medical Corporation prior to its acquisition by Genzyme. Mr. McFarlane previously served as an officer and enlisted soldier in the United States Army Reserves. He received his B.S. degree and M.S. degree in Nursing from the University of Florida. Our Board believes that Mr. McFarlane’s over 20 years of global biopharmaceutical and life sciences experience provide him with the qualifications and skills to serve as a director. Alvin Shih, M.D. Alvin Shih, M.D. has served as a director of our Company since January 2024. Dr. Shih has broad experience in drug development, spanning multiple indications with a focus on rare diseases, including as the chief operating officer and founding member of Pfizer Inc.'s rare disease research unit from May 2010 to May 2014. Most recently, he has served as president and chief executive officer of Catamaran Bio, Inc. since February 2021. Prior to his current role, from July 2019 to December 2020 he served as the chief executive officer of Disarm Therapeutics, a biotechnology company that developed therapeutics for neurodegenerative diseases and that was acquired by Eli Lilly in October 2020. Before that, Dr. Shih was chief executive officer of Enzyvant Therapeutics from November 2016 to February 2019, where he led the company's cell/tissue-based therapy development for treating a rare immunological disease. He was also the executive vice president and head of research at Retrophin, Inc. where he worked on therapies for multiple disease indications. Dr. Shih previously worked in management consulting at McKinsey & Company and L.E.K. Consulting, LLC. He received his medical degree from the University of Alabama and completed his residency training at Massachusetts General Hospital. Dr. Shih received his M.B.A. from the Kellogg School of Management at Northwestern University. The Board believes that Dr. Shih’s significant leadership experience in the biotechnology industry and his experience in rare disease qualifies him to serve on the Board.

  5. CLASS I DIRECTORS CONTINUING IN OFFICE UNTIL THE 2025 ANNUAL MEETING

    CLASS I DIRECTORS CONTINUING IN OFFICE UNTIL THE 2025 ANNUAL MEETING Wendy Dixon, Ph.D. Wendy Dixon, Ph.D. has served as a director of our Company since April 2023. Dr. Dixon has more than 40 years of biopharmaceutical industry experience in drug development with leadership roles in regulatory affairs and commercial capabilities. She currently serves on the board of directors of Arivinas, Inc. since June 2020, Black Diamond Therapeutics, Inc. since April 2022, and Iovance Biotherapeutics, Inc. since June 2022. Previously, Dr. Dixon has served on the boards of directors of Alkermes plc from January 2011 to May 2022, bluebird bio, Inc. from May 2013 to June 2021, Incyte from May 2010 to May 2022, Sesen Bio, Inc. (formerly Eleven Biotherapeutics, Inc.) from October 2014 to February 2020, Voyager Therapeutics, Inc. from January 2017 to January 2021, and was formerly on the boards of Ardea Biosciences from 2011 until 2012 when Ardea was acquired by AstraZeneca plc, Furiex Pharmaceuticals from 2010 until 2014 when Furiex was acquired by Actavis plc, Dentsply International from July 2005 to July 2010, and Orexigen Therapeutics, Inc. from April 2010 until January 2016. From December 2001 to May 2009, Dr. Dixon was chief marketing officer and president of global marketing at Bristol Myers Squibb, and served as a senior vice president of marketing at Merck from 1996 to 2001. Earlier in her career, she held executive management positions at West Pharmaceuticals, Osteotech and Centocor, as well as roles at SmithKline and French (now GlaxoSmithKline) in marketing, regulatory affairs, project management and as a biochemist. Dr. Dixon holds a Ph.D. in biochemistry and an M.Sc. and B.Sc. in Natural Science from the University of Cambridge.

  6. Tamara A. Favorito

    Tamara A. Favorito Tamara A. Favorito has served as a director and chair of the audit committee of our Company since August 2021, and as our board chair since May 2023. Ms. Favorito has more than 30 years of life sciences industry experience including 20 years as a chief financial officer. She currently serves as a board member and audit committee chair of Artelo Biosciences, Inc. since March 2021 and Kintara Therapeutics, Inc. since April 2021, both publicly-traded clinical-development stage companies. Ms. Favorito served on the board of directors of Beacon Discovery, Inc. from 2018 until their acquisition in March 2021. Ms. Favorito was interim chief financial officer of Immunic, Inc., a publicly-traded clinical-stage drug development company in 2019. She served as chief financial officer of Signal Genetics, Inc. (now Viridian Therapeutics, Inc.), a publicly-traded molecular diagnostics company, from 2014 to 2017, HemaQuest Pharmaceuticals, Inc., a venture-backed clinical-stage drug development company, from 2010 to 2014 and Favrille, Inc. (now MMR Global, Inc.), a publicly-traded clinical-stage drug development company, from 2001 to 2009. Earlier in her career, she spent eight years in public accounting with Deloitte & Touche LLP and PricewaterhouseCoopers LLP. Ms. Favorito is a certified public accountant (inactive). She received an MBA, emphasis in Finance, from Georgia State University, and a BBA, emphasis in Accounting, from Valdosta State University. Our Board believes that Ms. Favorito's deep experience in corporate management, finance and life science as chief financial officer of multiple public companies provides her with the qualifications and skills to serve as a director of our Company. Her extensive experience includes leading multiple private and public financings and M&A transactions as well as leading the finance, investor relations, human resources, administration and managed care functions.

  7. CLASS II DIRECTORS CONTINUING IN OFFICE UNTIL THE 2026 ANNUAL MEETING

    CLASS II DIRECTORS CONTINUING IN OFFICE UNTIL THE 2026 ANNUAL MEETING

  8. John B. Bode

    John B. Bode John B. Bode has served as a director of our Company since April 2023, and as the chair of the nominating and corporate governance committee since May 2023. Since February 2015, Mr. Bode has been the owner and managing director of Aerie Investments, LLC, an investment company focused on assisting legacy media companies and digital media start-ups with business development, strategic initiatives, and raising capital. Mr. Bode currently serves as the chief financial officer and chief transformation officer of Postmedia Network Canada Corp., a publishing company whose shares are traded on the Toronto Stock Exchange. Since September 2022, he has served as the interim chief executive officer of Fision Holdings, Inc. and previously served as an independent member of its board of directors from March 2018 to September 2022. Mr. Bode’s past corporate experience includes many years serving as a key executive and/or financial officer for leading public companies Prior to the founding of Aerie Investments, LLC, Mr. Bode was the chief financial officer of the Tribune Publishing Company from October 2013 to January 2015. From January 2011 to September 2013, Mr. Bode served as the chief financial officer of Source Interlink Companies, one of the largest enthusiast media companies in the United States and a leading distributor of periodicals, after serving in other accounting and finance roles with Source Interlink since 2002. Mr. Bode currently serves as on the board of The McClatchy Company, a leading privately-held publisher of newspapers, as well as of SPAR Group, Inc., a leading global provider of merchandising, marketing and distribution services that is listed on the Nasdaq. He was previously employed as a certified public accountant for BDO Seidman. Mr. Bode received a BS in accounting from Notre Dame University.

  9. Douglas W. Calder

    Douglas W. Calder Douglas W. Calder has served as a director of our Company since April 2023. Since 2015, Mr. Calder has served as president and a director of Vycellix, Inc and its subsidiaries and affiliates. He has also served as a member of the board of directors for NextGenNK since June 2019; member of the board of directors of BioFlorida since January 2019, and a member of the Society for Natural Immunity since July 2018. Mr. Calder has more than 30 years of life science executive experience, having served in various senior executive roles for Florida-based biotechnology companies and research institutes including Viragen, Accentia Biopharmaceuticals, Biovest International and the Vaccine & Gene Therapy Institute of Florida, as well as having formerly served as a registered financial portfolio manager with a focus on life science equities with the New York Stock Exchange member firms, Gruntal & Co. and Dean Witter Reynolds. Mr. Calder received a BA from Florida State University.

  10. Corey Watton

    Corey Watton Corey Watton has served as a director of our Company since April 2023. Mr. Watton currently serves as president and chief executive officer of Fusion Medical Staffing, LLC, since September 2023. Prior to his CEO role, Mr. Watton served as chief financial officer from August 2019 until September 2023. In that role he oversaw finance, project management, operations, facilities and legal, and previously oversaw human resources as well. From April 2009 through July 2019, he served as the chief financial officer of Home Instead Senior Health Care, a global leader in in-home health care, where he oversaw finance, subsidiary companies and the financial arm of an international subsidiary. He previously was a partner of Lutz & Company, a regional accounting firm from 1996 to 2009. Mr. Watton is a certified public accountant and received a BS in Finance and Accounting from University of Nebraska-Lincoln.

  11. INFORMATION REGARDING THE BOARD OF DIRECTORS AND CORPORATE GOVERNANCE

    INFORMATION REGARDING THE BOARD OF DIRECTORS AND CORPORATE GOVERNANCE

  12. APPROVAL OF AMENDED AND RESTATED 2014 EQUITY INCENTIVE PLAN

    APPROVAL OF AMENDED AND RESTATED 2014 EQUITY INCENTIVE PLAN

  13. Why We Are Asking Our Stockholders to Approve the A&R Plan

    Why We Are Asking Our Stockholders to Approve the A&R Plan We are seeking stockholder approval of the A&R Plan to, among other things, increase the number of shares available for the grant of stock options, restricted stock unit awards and other awards by 6,000,000 shares, and to extend the latest date on which incentive stock options may be granted under the A&R Plan as well as the annual automatic share increase to a date ten years from the date the A&R Plan is approved by stockholders, or on or about May 12, 2034, which is an extension of approximately three years, each of which will enable us to have a competitive equity incentive program to continue to compete with our peer group for key talent. Our stockholders’ approval of the A&R Plan will allow us to grant stock options, restricted stock unit awards and other awards at levels determined appropriate by the Board or Compensation Committee. The A&R Plan will also allow us to further utilize a broad array of equity incentives in order to secure and retain the services of our employees, directors and consultants, and to provide long-term incentives that align the interests of our employees, directors and consultants with the interests of our stockholders.

  14. Equity Awards Are an Important Part of Our Compensation Philosophy

    Equity Awards Are an Important Part of Our Compensation Philosophy The Board believes that the grant of equity awards is a key element underlying our ability to attract, retain and motivate our employees, directors and consultants because of the strong competition for highly trained and experienced individuals in commercial stage pharmaceutical companies. Therefore, the Board believes that the A&R Plan is in the best interests of our business and our stockholders and recommends a vote in favor of this Proposal 4. The A&R Plan will allow us to continue to utilize equity awards as long-term incentives to secure and retain the services of our employees, directors and consultants, consistent with our compensation philosophy and common compensation practices for our industry. To date, equity awards have been a key aspect of our program to attract and retain key employees, directors and consultants. We believe the use of equity awards strongly aligns the interests of our employees with those of our stockholders by placing a considerable proportion of our employees’ total compensation “at risk” because it is contingent on the appreciation in value of our common stock. In addition, we believe equity awards encourage employee ownership of our common stock and promote employee retention through the reward of long-term Company performance.

  15. We Carefully Manage the Use of Equity Awards and Dilution Is Reasonable

    We Carefully Manage the Use of Equity Awards and Dilution Is Reasonable Our compensation philosophy reflects broad-based eligibility for equity awards. However, we recognize that equity awards dilute existing stockholders, and, therefore, we are mindful to responsibly manage the growth of our equity compensation program. We are committed to effectively monitoring our equity compensation share reserve, including our “burn rate,” to ensure that we maximize stockholders’ value by granting the appropriate number of equity awards necessary to attract, reward, and retain employees, directors and consultants.

  16. Overhang

    | | As of December 31, 2023 | | Total number of shares of common stock subject to outstanding stock options | 8,023,142 | | Weighted-average exercise price of outstanding stock options | $8.40 | | Weighted-average remaining term of outstanding stock options | | | Total number of shares of common stock available for grant under our Existing Plan | 1,348,885 |

  17. Burn Rate

    | | Fiscal Year 2023 | Fiscal Year 2022 | Fiscal Year 2021 | | Total number of shares of common stock subject to stock options granted | 5,231,734 | 1,484,245 | 869,383 | | Weighted-average number of shares of common stock | 35,452,460 | 34,488,800 | 29,766,347 | | Burn Rate (1) | 14.8% | 4.3% | 2.9% |

  18. Burn Rate

    | (1) Burn Rate is calculated as: (shares subject to stock options granted + shares subject to time-based full value awards granted + shares subject to performance-based full value awards vested or earned)/weighted average common shares outstanding. |

  19. Burn Rate

    | ● | No discounted stock options or stock appreciation rights. All stock options and stock appreciation rights granted under the A&R Plan must have an exercise price equal to or greater than the fair market value of our common stock on the date the stock option or stock appreciation right is granted. | | ● | No liberal change in control definition. The change in control definition in the A&R Plan is not a “liberal” definition. A change in control transaction must actually occur in order for the change in control provisions in the A&R Plan to be triggered. | | ● | Limit on non-employee director compensation. The aggregate value of all compensation granted or paid, as applicable, to any individual for service as a non-employee director with respect to any period commencing on the date of the annual meeting of stockholders for a particular year and ending on the day immediately prior to the date of the annual meeting of stockholders for the next subsequent year, including awards granted and cash fees paid by the Company to such non-employee director, will generally not exceed $500,000 in total value calculating the value of any equity awards based on the grant date fair value of such equity awards for financial reporting purposes. | | ● | Clawback policy. All awards granted to our executive officers under the A&R Plan are subject to our clawback policy. |

  20. Types of Awards

    Types of Awards The terms of the A&R Plan provide for the grant of incentive stock options, nonstatutory stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards, performance awards, and other awards.

  21. Shares Available for Awards

    Shares Available for Awards Subject to adjustment for certain changes in our capitalization, the aggregate number of shares of our common stock that may be issued under the A&R Plan will not exceed the sum of (i) 14,985,108 shares of common stock (which includes shares issued or transferred pursuant to awards under the Existing Plan plus an additional 6,000,000 shares), and (ii) any shares subject to outstanding stock awards granted under the Existing Plan that, from and after the effective date of the A&R Plan, (A) expire or terminate for any reason prior to exercise or settlement, (B) are forfeited, cancelled or otherwise returned to us because of the failure to meet a contingency or condition required for the vesting of such shares, or (C) are reacquired or withheld (or not issued) by us to satisfy a tax withholding obligation in connection with a stock award. In addition, the share reserve will be automatically increased each year beginning on January 1, 2025, and ending on (and including) January 1, 2034, by the lesser of (a) four percent of the number of shares of our capital stock outstanding on December 31 of the preceding calendar year and (b) such lesser number determined by the Board. As of March 22, 2024, there were 7,819,683 shares subject to outstanding awards under the Existing Plan. The following actions will not result in an issuance of shares of our common stock under the A&R Plan and accordingly will not reduce the number of shares of our common stock available for issuance under the A&R Plan: (i) the expiration or termination of any portion of an award granted under the A&R Plan without the shares covered by such portion of the award having been issued; or (ii) the settlement of any portion of an award granted under the A&R Plan in cash. If any shares of our common stock issued pursuant to an award granted under the A&R Plan are forfeited back to or repurchased by us because of the failure to meet a contingency or condition required for the vesting of such shares, then such shares will become available again for issuance under the A&R Plan.

  22. Eligibility

    Eligibility All of our (including our affiliates’) employees, non-employee directors and consultants are eligible to participate in the A&R Plan and may receive all types of awards other than incentive stock options. Incentive stock options may be granted under the A&R Plan only to our (including our affiliates’) employees. As of March 22, 2024, we (including our affiliates) had approximately 80 employees and 7 non-employee directors.

  23. Administration

    Administration The A&R Plan will be administered by our Board, which may in turn delegate some or all of the administration of the A&R Plan to a committee or committees composed of members of the Board. Our Board has delegated concurrent authority to administer the A&R Plan to our Compensation Committee, but may, at any time, revest in itself some or all of the power delegated to our Compensation Committee. Our Board and Compensation Committee are each considered to be a Plan Administrator for purpose of this Proposal 4. Subject to the terms of the A&R Plan, the Plan Administrator may determine the recipients, the types of awards to be granted, the number of shares of our common stock subject to or the cash value of awards, and the terms and conditions of awards granted under the A&R Plan, including the period of their exercisability and vesting. Among other authority, the Plan Administrator also has the authority to amend outstanding awards, provided that no such amendment materially impairs the rights of the holder of such stock awards, to reprice options or to exchange underwater options for cash or other stock awards, and to provide for accelerated exercisability and vesting of awards. Subject to the limitations set forth below, the Plan Administrator also determines the fair market value applicable to an award and the exercise or strike price of stock options and stock appreciation rights granted under the A&R Plan. The Plan Administrator may also delegate to one or more executive officers the authority to designate employees who are not executive officers to be recipients of certain awards and the number of shares of our common stock subject to such awards. Under any such delegation, the Plan Administrator will specify the total number of shares of our common stock that may be subject to the awards granted by such executive officer. The executive officer may not grant an award to himself or herself.

  24. Limit on Non-Employee Director Compensation

    Limit on Non-Employee Director Compensation As noted above, the A&R Plan contains a limit on the aggregate value of all compensation granted or paid, as applicable, to any individual for service as a non-employee director with respect to any period commencing on the date of the annual meeting of stockholders for a particular year and ending on the day immediately prior to the date of the annual meeting of stockholders for the next subsequent year. Consulting fees or other compensation that may be paid to any non-employee director shall not be included in calculating such limits. Additionally, the Plan Administrator may make exceptions to this limit for individual non-employee directors in extraordinary circumstances, as the plan administrator may determine in its discretion, subject to the limitations in the A&R Plan.

  25. Stock Options

    Stock Options Stock options may be granted under the A&R Plan pursuant to stock option agreements. The A&R Plan permits the grant of stock options that are intended to qualify as incentive stock options, or ISOs, and nonstatutory stock options, or NSOs. The exercise price of a stock option granted under the A&R Plan may not be less than 100% of the fair market value of the common stock subject to the stock option on the date of grant (or 110%, in some cases, as described below). Stock options will vest as determined by the Plan Administrator at the rate specified in the stock option agreement. The term of stock options granted under the A&R Plan may not exceed ten years from the date of grant (or five years, in some cases, as described below). Acceptable forms of consideration for the purchase of our common stock pursuant to the exercise of a stock option under the A&R Plan will be determined by the Plan Administrator and may include payment: (i) by cash, check, bank draft or money order payable to us; (ii) pursuant to a program developed under Regulation T as promulgated by the Federal Reserve Board; (iii) by delivery to us of shares of our common stock (either by actual delivery or attestation); (iv) by a net exercise arrangement (for NSOs only); or (v) in other legal consideration approved by the Plan Administrator. Except as otherwise provided in a participant’s stock option agreement or other written agreement with us or one of our affiliates, if a participant’s continuous service with us or any of our affiliates:

  26. Stock Options

    | ● | terminates other than for cause (as defined in the A&R Plan) or due to death or disability (as defined in the A&R Plan), the participant may exercise any vested stock options for up to three months following termination; | | ● | terminates due to the participant’s disability, the participant may exercise any vested stock options for up to 12 months following termination; | | ● | terminates due to the participant’s death (or the participant dies within a specified period following termination), the participant’s beneficiary may exercise any vested stock options for up to 18 months following the participant’s death; or | | ● | is terminated for cause, all stock options held by the participant will terminate upon the participant’s termination and the participant will be prohibited from exercising any stock option from and after such termination date. |

  27. Stock Options

    The post-termination exercise period applicable to a participant’s stock option may be extended under specific circumstances provided in the A&R Plan, but in no event may a stock option be exercised after its original expiration date. Generally, a participant may not transfer a stock option granted under the A&R Plan other than by will or the laws of descent and distribution or, subject to approval by the Plan Administrator, pursuant to a domestic relations order.

  28. Limitations on Incentive Stock Options

    Limitations on Incentive Stock Options In accordance with current federal tax laws, the aggregate fair market value, determined at the time of grant, of shares of our common stock with respect to ISOs that are exercisable for the first time by a participant during any calendar year under all of our stock plans may not exceed $100,000. The stock options or portions of stock options that exceed this limit or otherwise fail to qualify as ISOs are treated as NSOs. No ISO may be granted to any person who, at the time of grant, owns or is deemed to own stock possessing more than 10% of our total combined voting power unless the following conditions are satisfied:

  29. Limitations on Incentive Stock Options

    | ● | the exercise price of the ISO must be at least 110% of the fair market value of the common stock subject to the ISO on the date of grant; and | | ● | the term of the ISO must not exceed five years from the date of grant. |

  30. Limitations on Incentive Stock Options

    Subject to adjustment for certain changes in our capitalization, the aggregate maximum number of shares of our common stock that may be issued pursuant to the exercise of ISOs under the A&R Plan is 19,600,000 shares.

  31. Stock Appreciation Rights

    Stock Appreciation Rights Stock appreciation rights may be granted under the A&R Plan pursuant to stock appreciation right agreements. Each stock appreciation right is denominated in common stock share equivalents. The strike price of each stock appreciation right will be determined by the Plan Administrator but will in no event be less than 100% of the fair market value of the common stock subject to the stock appreciation right on the date of grant. The term of stock appreciation rights granted under the A&R Plan may not exceed ten years from the date of grant. The Plan Administrator may also impose restrictions or conditions upon the vesting of stock appreciation rights that it deems appropriate. The appreciation distribution payable upon exercise of a stock appreciation right may be paid in shares of our common stock, in cash, in a combination of cash and stock, or in any other form of consideration determined by the Plan Administrator and set forth in the stock appreciation right agreement. Stock appreciation rights will be subject to the same conditions upon termination of continuous service and restrictions on transfer as stock options under the A&R Plan.

  32. Restricted Stock Awards

    Restricted Stock Awards Restricted stock awards may be granted under the A&R Plan pursuant to restricted stock award agreements. A restricted stock award may be granted in consideration for cash, check, bank draft or money order payable to us, the participant’s services performed for us, or any other form of legal consideration acceptable to the Plan Administrator. Shares of our common stock acquired under a restricted stock award may be subject to forfeiture to or repurchase by us in accordance with a vesting schedule to be determined by the Plan Administrator. Rights to acquire shares of our common stock under a restricted stock award may be transferred only upon such terms and conditions as are set forth in the restricted stock award agreement. Upon a participant’s termination of continuous service for any reason, any shares subject to restricted stock awards held by the participant that have not vested as of such termination date may be forfeited to or repurchased by us.

  33. Restricted Stock Unit Awards

    Restricted Stock Unit Awards Restricted stock unit awards may be granted under the A&R Plan pursuant to restricted stock unit award agreements. Payment of any purchase price may be made in any form of legal consideration acceptable to the Plan Administrator. A restricted stock unit award may be settled by the delivery of shares of our common stock, in cash, in a combination of cash and stock, or in any other form of consideration determined by the Plan Administrator and set forth in the restricted stock unit award agreement. Restricted stock unit awards may be subject to vesting in accordance with a vesting schedule to be determined by the Plan Administrator. Except as otherwise provided in a participant’s restricted stock unit award agreement or other written agreement with us, restricted stock units that have not vested will be forfeited upon the participant’s termination of continuous service for any reason.

  34. Corporate Transaction and Change in Control

    Corporate Transaction and Change in Control The following applies to each outstanding award under the A&R Plan in the event of a corporate transaction (as defined in the A&R Plan and described below) or a change in control (as defined in the A&R Plan and described below), unless provided otherwise in the applicable award agreement, in any other written agreement between a participant and the Company or an affiliate, or in any director compensation policy of the Company. For purposes of this Proposal 4, the term “Transaction” will mean such corporate transaction or change in control. In the event of a Transaction, the Plan Administrator may

  35. Corporate Transaction and Change in Control

    | ● | arrange for the assumption, continuation or substitution of a stock award by a successor corporation; | | ● | arrange for the assignment of any reacquisition or repurchase rights held by us to a successor corporation; | | ● | accelerate the vesting of the stock award and provide for its termination prior to the effective time of the corporate transaction; | | ● | arrange for the lapse, in whole or in part, of any reacquisition or repurchase right held by us; or | | ● | cancel the stock award prior to the transaction in exchange for a cash payment, which may be reduced by the exercise price payable in connection with the stock award. |

  36. Corporate Transaction and Change in Control

    The administrator is not obligated to treat all stock awards or portions of stock awards, even those that are of the same type, in the same manner. The administrator may take different actions with respect to the vested and unvested portions of a stock award. Under the A&R Plan, a “corporate transaction” generally means the consummation of any one or more of the following events: (1) a sale or other disposition of all or substantially all of our assets; (2) a sale or other disposition of at least 50% of our outstanding securities; (3) a merger, consolidation or similar transaction where we do not survive the transaction; or (4) a merger, consolidation or similar transaction where we do survive the transaction but the shares of our common stock outstanding immediately before such transaction are converted or exchanged into other property by virtue of the transaction. Under the A&R Plan, a “change in control” generally means the occurrence of any one or more of the following events: (1) the acquisition by any person, entity or group of our securities representing more than 50% of the combined voting power of our then outstanding securities, other than by virtue of a merger, consolidation, or similar transaction; (2) a consummated merger, consolidation or similar transaction in which our stockholders immediately before such transaction do not own, directly or indirectly, more than 50% of the combined voting power of the surviving entity (or the parent of the surviving entity) in substantially the same proportions as their ownership immediately prior to such transaction; (3) a consummated sale, lease, exclusive license or other disposition of all or substantially all of our assets, other than to an entity, more than 50% of the combined voting power of which is owned by our stockholders in substantially the same proportions as their ownership of our outstanding voting securities immediately prior to such transaction; or (4) when a majority of our board of directors becomes comprised of individuals who were not serving on our board of directors on the date the A&R Plan was adopted by our board of directors (the “incumbent board of directors”), or whose nomination, appointment, or election was not approved by a majority of the incumbent board of directors still in office.

  37. Nonstatutory Stock Options

    Nonstatutory Stock Options Generally, there is no taxation upon the grant of an NSO if the stock option is granted with an exercise price equal to the fair market value of the underlying stock on the grant date. Upon exercise, a participant will recognize ordinary income equal to the excess, if any, of the fair market value of the underlying stock on the date of exercise of the stock option over the exercise price. If the participant is employed by us or one of our affiliates, that income will be subject to withholding taxes. The participant’s tax basis in those shares will be equal to his or her fair market value on the date of exercise of the stock option, and the participant’s capital gain holding period for those shares will begin on that date. Subject to the requirement of reasonableness, the provisions of Section 162(m) of the Code, and the satisfaction of a tax reporting obligation, we will generally be entitled to a tax deduction equal to the taxable ordinary income realized by the participant.

  38. Incentive Stock Options

    Incentive Stock Options The A&R Plan provides for the grant of stock options that are intended to qualify as “incentive stock options,” as defined in Section 422 of the Code. Under the Code, a participant generally is not subject to ordinary income tax upon the grant or exercise of an ISO. If the participant holds a share received upon exercise of an ISO for more than two years from the date the stock option was granted and more than one year from the date the stock option was exercised, which is referred to as the required holding period, the difference, if any, between the amount realized on a sale or other taxable disposition of that share and the participant’s tax basis in that share will be long-term capital gain or loss. If, however, a participant disposes of a share acquired upon exercise of an ISO before the end of the required holding period, which is referred to as a disqualifying disposition, the participant generally will recognize ordinary income in the year of the disqualifying disposition equal to the excess, if any, of the fair market value of the share on the date of exercise of the stock option over the exercise price. However, if the sales proceeds are less than the fair market value of the share on the date of exercise of the stock option, the amount of ordinary income recognized by the participant will not exceed the gain, if any, realized on the sale. If the amount realized on a disqualifying disposition exceeds the fair market value of the share on the date of exercise of the stock option, that excess will be short-term or long-term capital gain, depending on whether the holding period for the share exceeds one year. For purposes of the alternative minimum tax, the amount by which the fair market value of a share of stock acquired upon exercise of an ISO exceeds the exercise price of the stock option generally will be an adjustment included in the participant’s alternative minimum taxable income for the year in which the stock option is exercised. If, however, there is a disqualifying disposition of the share in the year in which the stock option is exercised, there will be no adjustment for alternative minimum tax purposes with respect to that share. In computing alternative minimum taxable income, the tax basis of a share acquired upon exercise of an ISO is increased by the amount of the adjustment taken into account with respect to that share for alternative minimum tax purposes in the year the stock option is exercised. We are not allowed a tax deduction with respect to the grant or exercise of an ISO or the disposition of a share acquired upon exercise of an ISO after the required holding period. If there is a disqualifying disposition of a share, however, we will generally be entitled to a tax deduction equal to the taxable ordinary income realized by the participant, subject to the requirement of reasonableness, the provisions of Section 162(m) of the Code, and provided that either the employee includes that amount in income or we timely satisfy our reporting requirements with respect to that amount.

  39. Restricted Stock Awards

    Restricted Stock Awards Generally, the recipient of a restricted stock award will recognize ordinary income at the time the stock is received equal to the excess, if any, of the fair market value of the stock received over any amount paid by the recipient in exchange for the stock. If, however, the stock is not vested when it is received (for example, if the employee is required to work for a period of time in order to have the right to sell the stock), the recipient generally will not recognize income until the stock becomes vested, at which time the recipient will recognize ordinary income equal to the excess, if any, of the fair market value of the stock on the date it becomes vested over any amount paid by the recipient in exchange for the stock. A recipient may, however, file an election with the Internal Revenue Service, within 30 days following his or her receipt of the restricted stock award, to recognize ordinary income, as of the date the recipient receives the restricted stock award, equal to the excess, if any, of the fair market value of the stock on the date the restricted stock award is granted over any amount paid by the recipient for the stock. The recipient’s basis for the determination of gain or loss upon the subsequent disposition of shares acquired from a restricted stock award will be the amount paid for such shares plus any ordinary income recognized either when the stock is received or when the stock becomes vested. Subject to the requirement of reasonableness, the provisions of Section 162(m) of the Code, and the satisfaction of a tax reporting obligation, we will generally be entitled to a tax deduction equal to the taxable ordinary income realized by the recipient of the restricted stock award.

  40. Restricted Stock Unit Awards

    Restricted Stock Unit Awards Generally, the recipient of a restricted stock unit award structured to comply with the requirements of Section 409A of the Code or an exception to Section 409A of the Code will recognize ordinary income at the time the stock is delivered equal to the excess, if any, of the fair market value of the stock received over any amount paid by the recipient in exchange for the stock. To comply with the requirements of Section 409A of the Code, the stock subject to a restricted stock unit award may generally only be delivered upon one of the following events: a fixed calendar date (or dates), separation from service, death, disability or a change in control. If delivery occurs on another date, unless the restricted stock unit award otherwise complies with or qualifies for an exception to the requirements of Section 409A of the Code (including delivery upon achievement of a performance goal), in addition to the tax treatment described above, the recipient will owe an additional 20% federal tax and interest on any taxes owed. The recipient’s basis for the determination of gain or loss upon the subsequent disposition of shares acquired from a restricted stock unit award will be the amount paid for such shares plus any ordinary income recognized when the stock is delivered. Subject to the requirement of reasonableness, the provisions of Section 162(m) of the Code, and the satisfaction of a tax reporting obligation, we will generally be entitled to a tax deduction equal to the taxable ordinary income realized by the recipient of the restricted stock unit award.

  41. Additional Prior Award Information

    Additional Prior Award Information The following table sets forth, with respect to the individuals and groups identified therein, information regarding stock options, restricted stock awards and performance share awards that have been granted to such individuals and groups under the Existing Plan through March 22, 2024:

  42. Additional Prior Award Information

    | | Number of Stock Options (1) | Number of Restricted Stock Unit Awards (1) | Dollar Value of Restricted Stock Unit Awards (1) | | Named Executive Officers: | | | | | Neil F. McFarlane, President, Chief Executive Officer and Director | — | 700,000 | $4,032,000 | | Travis Mickle, Ph.D., Former President, Chief Executive Officer and Director | 636,898 | 547,945 | $3,156,163 | | Richard W. Pascoe, Former Chief Executive Officer and Director | 948,848 | — | — | | Christal M.M. Mickle, Former Interim Chief Executive Officer | 414,787 | 77,000 | $443,520 | | R. LaDuane Clifton, CPA, Chief Financial Officer, Secretary and Treasurer | 665,466 | 130,000 | $748,800 | | Josh Schafer, Chief Commercial Officer and EVP, Business Development | — | 106,000 | $610,560 | | All Current Executive Officers as a Group (6 persons) | 1,890,579 | 1,092,000 | $6,289,920 | | All Current Non-Employee Directors as a Group (7 persons) | 439,500 | — | — | | Director Nominees: | | | | | Thomas D. Anderson | 58,800 | — | — | | Neil F. McFarlane | — | 700,000 | $4,032,000 | | Alvin Shih, M.D. | 58,800 | — | — | | Each associate of any such directors, executive officers or nominees | — | — | — | | Each other person who received or is to receive 5 percent of such options, warrants or rights | — | — | — | | All Current Non-Executive Officer Employees as a group (75 persons) | 3,420,116 | 527,158 | $3,036,430 |

  43. Joshua Schafer

    Joshua Schafer Joshua Schafer has served as our chief commercial officer and executive vice president, business development since January 2023. Mr. Schafer brings to Zevra over 25 years of pharmaceutical commercial, new product development and merger and acquisition (“M&A”) experience. Mr. Schafer previously served as senior vice president and general manager of the Autoimmune and Rare Disease business at Mallinckrodt Pharmaceuticals from December 2020 to November 2022. Prior to that at Mallinckrodt Pharmaceuticals, he served as chief strategy and business officer from September 2019 to December 2020 and senior vice president of business development and general manager from January 2018 to September 2019. Prior to Mallinckrodt, Mr. Schafer served as vice president and oncology therapeutic area head, global marketing and strategy at Astellas Pharmaceuticals, where he was responsible for building the company's global oncology franchise, and also held senior roles at Takeda Pharmaceuticals, Accenture (formerly Anderson Consulting), G. D. Searle & Co. (later acquired by Pfizer) and Cognia Corporation. During his professional career, he has successfully led over $16 billion in aggregate M&A transactions. Mr. Schafer currently serves as a board member of Pharnext SA and Shuttle Pharmaceuticals. He received his B.A. in Biology and German at the University of Notre Dame, and both an M.S. in Biotechnology and an M.B.A. from Northwestern University.

  44. 2023 Summary Compensation Table

    2023 Summary Compensation Table The following table presents the compensation awarded to, earned by or paid to each of our named executive officers for the years ended December 31, 2023, and 2022, as applicable.

  45. 2023 Summary Compensation Table

    | Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($)(8) | Option Awards ($)(8) | Non-Equity Incentive Plan Compensation ($)(9) | All Other Compensation ($) | Total ($) | | Neil F. McFarlane (1) | 2023 | 157,500 | 200,000(6) | 735,365 | 2,206,096 | 105,535 | 40,735(10) | 3,445,231 | | President, Chief Executive Officer and Director | | | | | | | | | | Travis Mickle, Ph.D. (2) | 2023 | 186,520 | — | 2,204,788 | 354,085 | — | 848,045(11) | 3,593,438 | | Former President, Chief Executive Officer and Director | 2022 | 590,186 | — | — | 1,515,290 | 282,680 | 12,200 | 2,400,356 | | Richard W. Pascoe (3) | 2023 | 273,576 | — | — | 3,469,457 | — | 379,525(12) | 4,122,558 | | Former Chief Executive Officer and Director | 2022 | 422,917 | — | — | 722,921 | 202,938 | 12,200 | 1,360,976 | | Christal M.M. Mickle, M.A. (4) | 2023 | 435,500 | — | — | 1,047,596 | 173,264 | 13,596(13) | 1,669,956 | | Former Interim Chief Executive Officer | | | | | | | | | | R. LaDuane Clifton, MBA, CPA | 2023 | 446,480 | — | — | 1,604,822 | 197,132 | 14,823(14) | 2,263,257 | | Chief Financial Officer, Secretary and Treasurer | 2022 | 410,975 | — | — | 474,792 | 138,417 | 13,823 | 1,038,007 | | Joshua Schafer (5) | 2023 | 452,333 | 100,000(7) | — | 1,049,397 | 200,535 | 13,200(15) | 1,814,465 | | Chief Commercial Officer and Executive Vice President, Business Development | | | | | | | | |

  46. 2023 Summary Compensation Table

    | (1) Mr. McFarlane commenced employment with us on October 10, 2023. | | (2) Dr. Travis Mickle resigned from his role as the Company’s Chief Executive Officer on January 6, 2023. Dr. Travis Mickle served as the Company's President from January 6, 2023, until April 25, 2023. and was hired as a consultant effective April 25, 2023. | | (3) Mr. Pascoe served as the Company’s Chief Executive Officer from January 6, 2023, until June 1, 2023. | | (4) Ms. Christal Mickle served as the Company’s Interim Chief Executive Officer from June 1, 2023, until October 10, 2023. | | (5) Mr. Schafer commenced employment with us on January 6, 2023. | | (6) During 2023, Mr. McFarlane received the first installment of his signing bonus to assist with his move to the vicinity of the Company’s headquarters. Please refer to “Narrative to Summary Compensation Table—Employment Arrangements and Potential Payments upon Termination of Employment—Neil F. McFarlane” for further details. | | (7) The amount reflects a sign-on bonus paid to Mr. Schafer in connection with his commencement of employment. Please refer to “Narrative to Summary Compensation Table—Employment Arrangements and Potential Payments upon Termination of Employment—Joshua Schafer” for further details. | | (8) The amounts reflect the full grant date fair value for awards granted during 2023 and 2022. The grant date fair value was computed in accordance with ASC Topic 718, Compensation—Stock Compensation. Unlike the calculations contained in our financial statements, this calculation does not give effect to any estimate of forfeitures related to service-based vesting but assumes that the executive will perform the requisite service for the award to vest in full. The assumptions we used in valuing options are described in Note K to our audited financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023. In accordance with the SEC rules, the amount reported herein for the performance-based restricted stock units (“PSUs”) granted to Dr. Travis Mickle ($2,204,788) is based upon the probable outcome of such conditions as of the grant date in accordance with ASC Topic 718. For Dr. Travis Mickle and Mr. Pascoe, the amounts reported in the Option Awards column include $354,085 and $1,026,288, respectively, which represents the incremental fair value attributable to modifications made to such individual’s equity awards pursuant to their respective transition agreements. Please refer to “Narrative to Summary Compensation Table—Employment Arrangements and Potential Payments upon Termination of Employment” for further details. | | (9) The amounts reflect non-equity incentive plan awards paid in 2024 and 2023 for performance during 2023 and 2022, respectively. Please refer to "Narrative to Summary Compensation Table - Short-Term Incentive Plan (Non-Equity Annual Bonus) Awards" for further details. | | (10) The amount represents 401(k) employer matching contributions ($4,733), travel reimbursements ($14,865), gross-up tax payments ($1,137) and legal fee reimbursements incurred in connection with the negotiation of his employment agreement ($20,000). Please refer to “Narrative to Summary Compensation Table—Employment Arrangements and Potential Payments upon Termination of Employment” for further details. | | (11) The amount represents 401(k) employer matching contributions ($10,000), cash severance payments ($498,740), COBRA premiums ($19,305) and consulting fees for his service as a consultant during 2023 ($320,000). Please refer to “Narrative to Summary Compensation Table—Employment Arrangements and Potential Payments upon Termination of Employment” for further details. | | (12) The amount represents 401(k) employer matching contributions ($9,867), cash severance payments ($357,592) and COBRA premiums ($12,066). Please refer to “Narrative to Summary Compensation Table—Employment Arrangements and Potential Payments upon Termination of Employment” for further details. | | (13) The amount represents 401(k) employer matching contributions ($13,200), and premiums we paid for life insurance policies ($396). Please refer to “Narrative to Summary Compensation Table—Employment Arrangements and Potential Payments upon Termination of Employment” for further details. | | (14) The amount represents 401(k) employer matching contributions ($13,200), premiums we paid for life insurance policies ($704) and gross-up tax payments ($919). Please refer to “Narrative to Summary Compensation Table—Employment Arrangements and Potential Payments upon Termination of Employment” for further details. | | (15) The amount represents 401(k) employer matching contributions ($13,200). Please refer to “Narrative to Summary Compensation Table—Employment Arrangements and Potential Payments upon Termination of Employment” for further details. |

  47. Employment Arrangements and Potential Payments upon Termination of Employment

    Employment Arrangements and Potential Payments upon Termination of Employment In October 2023, we entered into an employment agreement with Mr. McFarlane under which he serves as our President and Chief Executive Officer. Pursuant to the employment agreement, Mr. McFarlane is entitled to (i) an initial annual base salary of $700,000, (ii) an annual performance-based target bonus of 60% of his annual base salary, (iii) an initial award of an option to purchase 600,000 shares of the Company’s common stock and (iv) an initial award of RSUs covering 200,000 shares of the Company's common stock. The option and RSUs were granted to Mr. McFarlane under the 2023 Plan. In addition, Mr. McFarlane was entitled to receive reimbursement for commuting expenses (together with a tax gross-up related thereto), and a cash bonus of up to $350,000 to assist with his move to the Company’s headquarters (the “Relocation Bonus”), payable in two installments. The first installment of the Relocation Bonus was $200,000 and was paid shortly after the commencement of his employment. The second installment of the Relocation Bonus, which is $150,000, is payable upon his move to within fifty (50) miles of the Company’s headquarters prior to the first anniversary of the commencement of his employment, which is October 10, 2024. The Relocation Bonus is subject to repayment if Mr. McFarlane resigns for any reason (other than for “good reason,” as defined in Mr. McFarlane’s employment agreement) or is terminated for “cause” (as defined in Mr. McFarlane’s employment agreement), in either case, within two years after the commencement of his employment. Mr. McFarlane was also entitled to reimbursement of legal fees of up to $20,000 in connection with the negotiation of his employment agreement. Upon a termination of Mr. McFarlane’s employment without cause by the Company or resignation for good reason, Mr. McFarlane is entitled to receive (a) an amount of cash equal to 1.0 times annual base salary, (b) a pro-rated target annual bonus for the year in which termination occurs, (c) twelve months of Company paid COBRA continuation coverage, and (d) full vesting of his outstanding and unvested equity awards. However, if any such termination occurs within one month prior to or six months after a change in control, he will instead receive (a) an amount of cash equal to 1.5 times annual base salary, (b) a target annual bonus for the year in which termination occurs, (c) eighteen months of Company paid COBRA continuation coverage, and (d) full vesting of his outstanding and unvested equity awards. Upon Mr. McFarlane’s termination due to death or disability, Mr. McFarlane will receive a pro-rated target annual bonus. Mr. McFarlane is also subject to 12-month post-termination non-competition and non-solicitation restrictions. Travis Mickle, Ph.D. In connection with Dr. Travis Mickle’s resignation as the Company’s Chief Executive Officer on January 6, 2023, the Company entered into a transition agreement (the “Mickle Transition Agreement”) and a consulting agreement (the “Consulting Agreement”) with Dr. Travis Mickle. Pursuant to the terms of the Mickle Transition Agreement, in exchange for his execution of a release of claims in the Company’s favor, Dr. Travis Mickle became entitled to receive severance payments and benefits consisting of (i) continued payment of his base salary for 18 months following the date on which Dr. Travis Mickle’s employment with the Company ended, which was April 25, 2023 (the “Mickle Separation Date”), (ii) up to 18 months of continued medical, dental and vision coverage pursuant to COBRA and (iii) a one-time, lump sum bonus payment equal to a pro rata amount of his annual performance-based target bonus for 2023. In addition, immediately prior to the Mickle Separation Date, all outstanding options to purchase the Company’s common stock held by Dr. Travis Mickle vested in full, and such accelerated vested options may be exercised through the later of (i) the 18-month anniversary of the date of the Mickle Transition Agreement and (ii) the date of the termination of the Consulting Agreement. Pursuant to the terms of the Consulting Agreement, Dr. Travis Mickle agreed to provide consulting services until April 25, 2024. In exchange for such services, Dr. Travis Mickle receives consulting fees of $40,000 per month. In addition, Dr. Travis Mickle was granted 547,945 PSUs under the 2014 Plan, which will vest in full upon the timely achievement of a clinical and development milestone, subject to forfeiture upon certain disqualifying events. Richard W. Pascoe In connection with Mr. Pascoe’s appointment as the Company’s Chief Executive Officer on January 6, 2023, the Company and Mr. Pascoe entered into an amendment to his employment agreement, dated November 5, 2021 (the “Pascoe Amendment”). Pursuant to the Pascoe Amendment, (i) Mr. Pascoe’s annual base salary was increased to $592,000, (ii) his annual performance-based target bonus was increased to 55% of his annual base salary, and (iii) he became entitled to receive an option under the 2014 Plan to purchase 700,000 shares of the Company’s common stock. Upon Mr. Pascoe’s resignation as the Company’s Chief Executive Officer on June 1, 2023, the Company entered into a transition agreement with Mr. Pascoe (the “Pascoe Transition Agreement”). Mr. Pascoe continued to earn his Chief Executive Officer base salary and participate in the Company’s benefit plans. Pursuant to the terms of the Pascoe Transition Agreement, following his execution of a release of claims in the Company’s favor, Mr. Pascoe became entitled to receive severance payments and benefits consisting of (i) continued payment of his base salary for 12 months following the date on which Mr. Pascoe’s employment with the Company ended, which was June 1, 2023 (the “Pascoe Separation Date”), (ii) up to 12 months of continued medical, dental and vision coverage pursuant to COBRA, (iii) an amount equal to Mr. Pascoe’s target annual bonus, pro-rated through the Pascoe Separation Date and (iv) accelerated vesting of his outstanding equity awards. In addition, the exercise period of vested options to purchase the Company’s common stock held by Mr. Pascoe were extended through the nine-month anniversary of the Pascoe Separation Date. Christal M.M. Mickle, M.A. In 2014, we entered into an employment agreement with Ms. Christal Mickle under which she serves as our Chief Development Officer (as amended, the “Mickle Agreement”). Pursuant to the Mickle Agreement, Ms. Christal Mickle is entitled to (i) an annual base salary and (ii) an annual performance-based bonus opportunity. Ms. Christal Mickle is also subject to 12-month post-termination non-competition and non-solicitation restrictions.

  48. Employment Arrangements and Potential Payments upon Termination of Employment

    In the event that we terminate Ms. Christal Mickle without “cause” or she resigns for “good reason” (in each case, as defined in the Mickle Agreement), Ms. Christal Mickle will be entitled to receive (a) an amount equal to 12 months of her annual base salary, less applicable deductions, payable in accordance with our normal payroll schedule, (b) a pro-rated target annual bonus for the year in which termination occurs, (c) twelve months of Company paid COBRA continuation coverage, and (d) full vesting of her outstanding and unvested equity awards, except that if such termination occurs within 60 days before, upon or within one year following a sale that constitutes a “change in control event” as defined in Section 409A of the Code then in lieu of the payment described in clause (a), Ms. Christal Mickle will be entitled to a lump sum payment equal to her annual base salary. In the event that we terminate Ms. Christal Mickle with cause, Ms. Christal Mickle resigns without good reason, or the employment is terminated due to mutual agreement, death or disability, then Ms. Christal Mickle will not be entitled to receive severance benefits. Additionally, under the terms of the Mickle Agreement, if we undergo a change of control, all then unvested and outstanding equity awards shall become fully vested and immediately exercisable immediately prior to such change in control. In connection with Ms. Christal Mickle’s appointment as interim President and Chief Executive Officer on June 1, 2023, Zevra and Ms. Christal Mickle entered into a letter agreement pursuant to which she served as the Company’s interim Chief Executive Officer and President until a new Chief Executive Officer of the Company was appointed (which was October 10, 2023). During this transition period, she was paid at an annual rate of $512,000 while she served as interim President and Chief Executive Officer. Following the expiration of this transition period, the terms of Ms. Christal Mickle’s employment reverted to those terms as in effect immediately prior to her appointment as our interim President and Chief Executive Officer. R. LaDuane Clifton, MBA, CPA In 2015, we entered into an amended and restated employment agreement with Mr. Clifton under which he serves as our Chief Financial Officer (as amended, the “Clifton Agreement”). Pursuant to the Clifton Agreement, Mr. Clifton is entitled to (i) an annual base salary and (ii) an annual performance-based bonus opportunity. Mr. Clifton is also subject to 12-month post-termination non-competition and non-solicitation restrictions. In the event that we terminate Mr. Clifton without “cause” or he resigns for “good reason” (in each case, as defined in the Clifton Agreement), Mr. Clifton will be entitled to receive (a) an amount equal to 12 months of his annual base salary, less applicable deductions, payable in accordance with our normal payroll schedule, (b) a pro-rated target annual bonus for the year in which termination occurs, (c) 12 months of Company paid COBRA continuation coverage and (d) full vesting of his outstanding equity awards, except that if such termination occurs upon or within one year following a sale that constitutes a “change in control event” as defined in Section 409A of the Code then in lieu of the payment described in clause (a) Mr. Clifton will be entitled to a lump sum payment equal to his annual base salary on the first regularly scheduled pay day immediately following the effective date of his termination. In the event that we terminate Mr. Clifton with cause, Mr. Clifton resigns without good reason, or the employment is terminated due to mutual agreement, death or disability, then Mr. Clifton will not be entitled to receive severance benefits. Under the terms of the Clifton Agreement, if we undergo a change of control, all then unvested and outstanding equity awards shall become fully vested and immediately exercisable immediately prior to such change in control. Joshua Schafer In January 2023, we entered into an employment agreement with Mr. Schafer under which he serves as our Chief Commercial Officer and Executive Vice President of Business Development (the “Schafer Agreement”). Pursuant to the Schafer Agreement, Mr. Schafer is entitled to (i) an initial annual base salary of $460,000, (ii) an annual performance-based target bonus of 40% of his annual base salary and (iii) an initial award of an option to purchase 300,000 shares of the Company’s common stock. In addition, Mr. Schafer was entitled to receive a cash signing bonus of $100,000 in connection with his commencement of employment (the “Signing Bonus”). The Signing Bonus was subject to repayment if Mr. Schafer resigned for any reason (other than for “good reason,” as defined in the Schafer Agreement) or was terminated for “cause” (as defined in the Schafer Agreement), in either case, within six months after the commencement of his employment. Upon a termination of Mr. Schafer’s employment without cause by the Company or resignation for good reason, Mr. Schafer is entitled to receive (a) an amount equal to 12 months of his annual base salary, less applicable deductions, payable in accordance with our normal payroll schedule, (b) a pro-rated target annual bonus for the year in which termination occurs, (c) 12 months of Company paid COBRA continuation coverage, and (d) full vesting of his outstanding and unvested equity awards, except that if such termination occurs within one year following a sale that constitutes a “change in control event” as defined in Section 409A of the Code, then in lieu of the payment described in clause (a), Mr. Schafer will be entitled to a lump sum payment equal to 1.0 times his annual base salary. Upon Mr. Schafer’s termination due to death or disability, Mr. Schafer will receive a pro-rated target annual bonus. Mr. Schafer is also subject to 12-month post-termination non-competition and non-solicitation restrictions.

  49. Outstanding Equity Awards at End of 2023

    Outstanding Equity Awards at End of 2023 The following table provides information about outstanding stock options held by each of our named executive officers at December 31, 2023. All of these options were granted under our 2007 stock incentive plan (the “2007 Plan”), our 2014 Plan, or the 2023 Plan.

  50. Outstanding Equity Awards at End of 2023

    | | | Option Awards (1) | | | | Stock Awards(1) | | | | | Name | Grant Date | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($)(2) | Equity incentive plan awards: number of unearned shares, units or other rights that have not vested (#) | Equity incentive plan awards: market or payout value of unearned shares, units or other rights that have not vested ($) (2) | | Neil F. McFarlane | 10/10/2023 | — | 600,000(3) | 4.75 | 10/09/2033 | | | | | | | 10/10/2023 | | | | | 200,000(4) | 1,310,000 | | | | Travis Mickle, Ph. D. (5) | 07/30/2014 | 1,666 | — | 93.60 | 07/29/2024 | — | — | | | | | 09/04/2015 | 13,750 | — | 327.20 | 09/03/2025 | — | — | | | | | 02/11/2016 | 9,375 | — | 201.92 | 02/10/2026 | — | — | | | | | 01/27/2017 | 14,062 | — | 56.80 | 01/26/2027 | — | — | | | | | 01/25/2018 | 14,062 | — | 88.00 | 01/24/2028 | — | — | | | | | 02/06/2019 | 26,250 | — | 42.56 | 02/05/2029 | — | — | | | | | 11/25/2019 | 2,250 | — | 8.26 | 11/24/2029 | — | — | | | | | 02/05/2020 | 26,250 | — | 5.98 | 02/04/2030 | — | — | | | | | 08/20/2021 | 263,743 | — | 9.06 | 08/19/2031 | — | — | | | | | 02/01/2022 | 267,156 | — | 7.17 | 01/31/2032 | — | — | | | | | 01/06/2023 | — | — | — | — | — | — | 547,945(6) | 3,589,040 | | Richard W. Pascoe (7) | 08/25/2015 | 625 | — | 304.32 | 02/29/2024 | — | — | | | | | 05/24/2016 | 625 | — | 96.80 | 02/29/2024 | — | — | | | | | 05/23/2017 | 625 | — | 63.20 | 02/29/2024 | — | — | | | | | 05/22/2018 | 937 | — | 97.60 | 02/29/2024 | — | — | | | | | 04/24/2019 | 1,875 | — | 25.92 | 02/29/2024 | — | — | | | | | 06/19/2020 | 1,875 | — | 4.34 | 02/29/2024 | — | — | | | | | 06/17/2021 | 15,000 | — | 15.47 | 02/29/2024 | — | — | | | | | 11/10/2021 | 100,000 | — | 9.10 | 02/29/2024 | — | — | | | | | 02/01/2022 | 127,286 | — | 7.17 | 02/29/2024 | — | — | | | | | 01/09/2023 | 700,000 | — | 4.54 | 02/29/2024 | — | — | | | | R. LaDuane Clifton, MBA, CPA | 04/15/2015 | 1,333 | — | 176.00 | 04/01/2025 | | | | | | | 06/25/2015 | 2,812 | — | 292.64 | 06/25/2025 | | | | | | | 09/04/2015 | 937 | — | 327.20 | 09/03/2025 | | | | | | | 02/11/2016 | 3,125 | — | 201.92 | 02/10/2026 | | | | | | | 01/27/2017 | 4,687 | — | 56.80 | 01/26/2027 | | | | | | | 01/25/2018 | 4,687 | — | 88.00 | 01/24/2028 | | | | | | | 02/06/2019 | 10,000 | — | 42.56 | 02/05/2029 | | | | | | | 11/25/2019 | 2,250 | — | 8.26 | 11/24/2029 | | | | | | | 02/05/2020 | 10,000 | — | 5.98 | 02/04/2030 | | | | | | | 08/20/2021 | 41,211 | 41,212 (3) | 9.06 | 08/19/2031 | | | | | | | 02/01/2022 | 20,871 | 62,615 (3) | 7.17 | 01/31/2032 | | | | | | | 01/09/2023 | — | 459,726(8) | 4.54 | 01/08/2023 | | | | | | Christal M.M. Mickle, M.A. | 07/09/2014 | 1,250 | — | 93.60 | 07/08/2024 | — | — | | | | | 09/04/2015 | 1,562 | — | 327.20 | 09/03/2025 | — | — | | | | | 02/11/2016 | 1,250 | — | 201.92 | 02/10/2026 | — | — | | | | | 01/07/2017 | 1,875 | — | 56.80 | 01/06/2027 | — | — | | | | | 01/25/2018 | 1.875 | — | 88.00 | 01/24/2028 | — | — | | | | | 02/06/2019 | 3,750 | — | 42.56 | 02/05/2029 | — | — | | | | | 11/25/2019 | 2,250 | — | 8.26 | 11/24/2029 | — | — | | | | | 02/05/2030 | 3,750 | — | 5.98 | 02/04/2030 | — | — | | | | | 08/20/2021 | 24,191 | 24,192(3) | 9.06 | 08/19/2031 | — | — | | | | | 02/01/2022 | 12,523 | 37,569(3) | 7.17 | 01/31/2032 | — | — | | | | | 01/09/2023 | — | 300,000(8) | 4.54 | 01/08/2033 | — | — | | | | Joshua Schafer | 01/09/2023 | — | 300,000(8) | 4.54 | 01/08/2033 | — | — | | |

  51. Outstanding Equity Awards at End of 2023

    | (1) The option awards will vest in full and become immediately exercisable (i) in the event that the option holder is terminated by us without cause or resigns for good reason or (ii) immediately prior to any change in control of Zevra. | | (2) Market value calculated using the closing price per share of our common stock on December 29, 2023 (the last trading day of 2023) of $6.55. | | (3) The shares underlying the options vest in equal annual installments over a period of four years beginning on the first anniversary of the grant date, subject to continued service. | | (4) The RSUs vest in equal annual installments over a period of four years beginning on the first anniversary of the grant date, subject to continued service. The award may be subject to accelerated vesting, as described above in the section entitled “Employment Arrangements and Potential Payments upon Termination of Employment”. | | (5) In connection with his transition agreement, Dr. Travis Mickle received accelerated vesting of his then outstanding equity awards. Please see the section entitled “Employment Arrangements and Potential Payments upon Termination of Employment” for additional details. | | (6) The PSUs were granted to Dr. Travis Mickle in connection with his consulting agreement and vest upon the Company’s achievement of a clinical and development milestone prior to December 31, 2024, subject to Dr. Mickle’s continued service to the Company. | | (7) In connection with his transition agreement, Mr. Pascoe received accelerated vesting of his outstanding equity awards. Please see the section entitled “Employment Arrangements and Potential Payments upon Termination of Employment” for additional details. | | (8) The shares underlying the option vest in equal annual installments over a period of four years beginning on January 6, 2024 through January 6, 2027, subject to continued service. |

  52. Pay Versus Performance

    Pay Versus Performance In accordance with the SEC’s disclosure requirements regarding pay versus performance, or PVP, this section presents the SEC-defined “Compensation Actually Paid,” or CAP. Also required by the SEC, this section compares CAP to various measures used to gauge our performance. CAP is a supplemental measure to be viewed alongside performance measures as an addition to the philosophy and strategy of compensation-setting discussed elsewhere in the overview of the executive compensation program, not in replacement.

  53. Pay Versus Performance Table

    Pay Versus Performance Table The following table sets forth information concerning the compensation of our named executive officers for each of the fiscal years ended December 31, 2023, 2022 and 2021, and our financial performance for each such fiscal year:

  54. Pay Versus Performance Table

    | | | | | | | | | | | | Value of Initial Fixed $100 Investment Based on: | | | Year | Summary Compensation Table Total for Current PEO ($)(1) | Compensation Actually Paid to Current PEO ($)(1) | Summary Compensation Table Total for Travis Mickle, Ph.D. ($)(2) | Compensation Actually Paid to Travis Mickle, Ph.D. ($)(2) | Summary Compensation Table Total for Richard W. Pascoe ($)(3) | Compensation Actually Paid to Richard W. Pascoe ($)(3) | Summary Compensation Table Total for Christal M.M. Mickle ($)(4) | Compensation Actually Paid to Christal M.M. Mickle ($)(4) | Average Summary Compensation Table Total for Non-PEO NEOs ($)(5) | Average Compensation Actually Paid to Non-PEO NEOs ($)(5) | Total Shareholder Return ($) | Net Income ($) | | 2023 | 3,445,231 | 4,975,770 | 3,593,438 | 4,385,998 | 4,122,558 | 3,308,589 | 1,669,956 | 2,211,127 | 2,039,861 | 2,724,999 | 58.48 | (46,049,000) | | 2022 | — | — | 2,400,356 | 1,349,703 | — | — | — | — | 1,199,492 | 1,106,040 | 40.98 | (41,543,000) | | 2021 | — | — | 2,657,059 | 2,808,110 | — | — | — | — | 953,616 | 989,957 | 77.77 | (8,555,000) |

  55. Pay Versus Performance Table

    (1) Mr. McFarlane became our Chief Executive Officer on October 10, 2023. (2) Dr. Travis Mickle served as the Company’s Chief Executive Officer in 2021, 2022 and from January 1, 2023 until January 6, 2023. (3) Mr. Pascoe served as the Company’s Chief Executive Officer from January 6, 2023, until June 1, 2023. As noted below, Mr. Pascoe also served as a non-PEO NEO during 2022 and 2021, and his compensation for those years is reflected in the columns entitled “Average Summary Compensation Table Total for Non-PEO NEOs” and “Average Compensation Actually Paid to Non-PEO NEOs.” (4) Ms. Christal Mickle served as the Company’s Interim Chief Executive Officer from June 1, 2023, until October 10, 2023. (5) Amounts represent the average compensation actually paid to our remaining named executive officers for the relevant fiscal year, as determined under SEC rules (and described below), which includes the individuals indicated in the table below for each fiscal year.

  56. Pay Versus Performance Table

    | Year | Non-PEO NEOs | | 2023 | R. LaDuane Clifton, MBA, CPA and Joshua Schafer | | 2022 | Richard W. Pascoe and R. LaDuane Clifton, MBA, CPA | | 2021 | Richard W. Pascoe, Sven Guenther, Ph.D. and R. LaDuane Clifton, MBA, CPA |

  57. Pay Versus Performance Table

    | | 2023 | | | | | | Adjustments | Current PEO | Travis C. Mickle, Ph.D. | Richard W. Pascoe | Christal M.M. Mickle | Average Non-PEO NEOs | | Deduction for Amounts Reported under the “Stock Awards” and “Option Awards” Columns in the Summary Compensation Table for Applicable FY | (2,941,461) | (2,558,873) | (3,469,457) | (1,047,596) | (1,327,110) | | Increase based on ASC 718 Fair Value of Awards Granted during Applicable FY that Remain Unvested as of Applicable FY End, determined as of Applicable FY End | 4,472,000 | 3,589,040 | — | 1,590,000 | 2,013,274 | | Increase based on ASC 718 Fair Value of Awards Granted during Applicable FY that Vested during Applicable FY, determined as of Vesting Date | — | — | 2,814,000 | — | — | | Increase/deduction for Awards Granted during Prior FY that were Outstanding and Unvested as of Applicable FY End, determined based on change in ASC 718 Fair Value from Prior FY End to Applicable FY End | — | — | — | 13,320 | 11,795 | | Increase/deduction for Awards Granted during Prior FY that Vested During Applicable FY, determined based on change in ASC 718 Fair Value from Prior FY End to Vesting Date | — | (237,607) | (158,512) | (14,553) | (11,821) | | Deduction of ASC 718 Fair Value of Awards Granted during Prior FY that were Forfeited during Applicable FY, determined as of Prior FY End | — | — | — | — | — | | Increase based on Dividends or Other Earnings Paid during Applicable FY prior to Vesting Date | — | — | — | — | — | | Increase based on Incremental Fair Value of Options/SARs Modified during Applicable FY | — | — | — | — | — | | TOTAL ADJUSTMENTS | 1,530,539 | 792,560 | (813,969) | 541,171 | 686,138 |

  58. DIRECTOR COMPENSATION

    DIRECTOR COMPENSATION Our Compensation Committee has adopted a non-employee director compensation policy, which provides for cash stipends to be paid to each of our nonemployee directors for service on the Board and for service on the Audit Committee, the Compensation Committee and the Nominating and Corporate Governance Committee. These stipends are payable in four equal quarterly installments on the last day of each quarter. The cash stipends payable under this policy were initially as follows for 2023:

  59. DIRECTOR COMPENSATION

    | | Member Annual Service Stipend ($) | Chairman Additional Annual Service Stipend ($) | | Board of Directors | 40,000 | 15,000 | | Audit Committee | 7,500 | 15,000 | | Compensation Committee | 5,000 | 10,000 | | Nominating and Corporate Governance Committee | 5,000 | 7,500 | | Lead independent director* | 15,000 | — |

  60. DIRECTOR COMPENSATION

    Additionally, under this policy, each non-employee director who continues to serve as a non-employee member of our Board, following the annual meeting of our stockholders is eligible to receive an option to purchase 15,000 shares of our common stock at an exercise price equal to the last reported sale price of our common stock on The Nasdaq Stock Market on the date of grant. These stock options will vest and become exercisable in full on the earliest of (i) the first anniversary of the grant date, (ii) the day before the first annual stockholders meeting occurring after the grant date or (iii) immediately prior to a change in control of the Company, subject in each case to the director’s continued service on such vesting date. Following the annual non-employee director compensation policy reviews undertaken by the Board, and based upon the recommendation of the Compensation Committee after consultation with Mercer, the Board elected to revise the policy, effective February 15, 2023. The table below summarizes cash compensation to be paid under the policy as amended effective February 15, 2023. Additionally, the Board revised the policy to increase the number of shares subject to the option to be granted annually under the policy from 15,000 to 39,200 (or, for the Chairman of the Board, 49,200).

  61. DIRECTOR COMPENSATION

    | | Member Annual Service Stipend ($) | Chairman Additional Annual Service Stipend ($) | | Board of Directors | 40,000 | 75,000 | | Audit Committee | 9,000 | 22,500 | | Compensation Committee | 7,000 | 15,000 | | Nominating and Corporate Governance Committee | 5,000 | 12,500 | | Lead independent director* | 15,000 | — | | * If one is appointed. | | |

  62. DIRECTOR COMPENSATION

    Effective May 3, 2023, the Board further amended the non-employee director compensation policy. In addition to the above, upon the commencement of a non-employee director’s initial term of service to the Board, such individual will automatically be granted a stock option covering 1.5x the number of shares covering the annual grants to non-employee directors. The initial grants will vest and become exercisable in three equal installments on the date that is one day prior to the date of the first three annual meeting of stockholders following the date of grant, subject accelerated vesting upon a change in control of the Company (and in each case, subject to continued service on the Board).

  63. 2023 Director Compensation Table

    2023 Director Compensation Table The following table sets forth information regarding compensation earned for service on our Board during 2023 by our non-employee directors. Mr. McFarlane, our President and Chief Executive Officer, was also a director during 2023 but did not receive any additional compensation for his service as a director. Mr. McFarlane’s compensation as an executive officer is set forth above under “Executive Compensation—Summary Compensation Table.” Mr. Pascoe, our former Executive Chairman and Chief Executive Officer, and Dr. Travis Mickle, our former President and Chief Executive Officer, were also directors during 2023 but did not receive any additional compensation for their services on our Board. Mr. Pascoe and Dr. Travis Mickle's compensation as executive officers is set forth above under “Executive Compensation—Summary Compensation Table.”

  64. 2023 Director Compensation Table

    | Name | Fees Earned or Paid in Cash ($) | Option Awards (1) ($) | Total ($) | | Matthew R. Plooster | 53,768 | 206,419 | 260,187 | | Christopher A. Posner | 17,846 | — | 17,846 | | Joseph B. Saluri | 44,522 | 164,464 | 208,986 | | David S. Tierney, M.D. | 16,571 | — | 16,571 | | Thomas D. Anderson | 23,791 | 219,244 | 243,035 | | John B. Bode | 41,598 | 222,710 | 264,308 | | Douglas W. Calder | 35,308 | 222,710 | 258,018 | | Wendy Dixon, Ph.D. | 40,604 | 233,396 | 274,000 | | Tamara A. Favorito | 121,882 | 202,507 | 324,389 | | Corey Watton | 37,956 | 222,710 | 260,666 |

  65. 2023 Director Compensation Table

    | (1) This column reflects the full grant date fair value for options granted during the year as measured pursuant to ASC Topic 718 as stock-based compensation in our financial statements. Unlike the calculations contained in our financial statements, this calculation does not give effect to any estimate of forfeitures related to service-based vesting but assumes that the director will perform the requisite service for the award to vest in full. The assumptions we used in valuing options are described in Note K to our audited financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023. See the table below for the number of option awards outstanding as of December 31, 2023. |

  66. 2023 Director Compensation Table

    The table below shows the aggregate number of option awards outstanding for each of our non-employee directors as of December 31, 2023:

  67. 2023 Director Compensation Table

    | Name | Aggregate Option Awards Outstanding (#) | | Matthew R. Plooster | 86,512(1) | | Christopher A. Posner | — | | Joseph B. Saluri | 75,762(1) | | David S. Tierney, M.D. | 37,020(1) | | Thomas D. Anderson | 58,800(2) | | John B. Bode | 58,800(2) | | Douglas W. Calder | 58,800(2) | | Wendy Dixon, Ph.D. | 58,800(2) | | Tamara A. Favorito | 86,700(3) | | Corey Watton | 58,800(2) |

  68. 2023 Director Compensation Table

    | (1) As of December 31, 2023, all shares underlying these options were vested. | | (2) The shares underlying these options will vest in equal annual installments over a period of three years beginning one day prior to the date of the first annual meeting of stockholders following the day of grant and continuing for the next two annual meeting of stockholders, such that the option will be fully vested one day prior to the date of the third annual meeting of the stockholders following the day of the grant, subject to continued service. | | (3) As of December 31, 2023, 30,000 shares underlying these options were vested. Of the remaining shares underlying these options, (a) 7,500 will best on August 18, 2024, (b) 39,200 will vest on the earlier of (i) April 25, 2024, or (ii) one day prior to the date of the Annual Meeting, and (c) 10,000 shares underlying these options will vest on the earlier of (i) May 30, 2024, or (ii) one day prior to the Annual Meeting, subject to continued service. |