Pyxis Oncology, Inc.

EXECUTIVE COMPENSATION

The following is a discussion and analysis of compensation arrangements of our named executive officers. As an “emerging growth company” as defined in the JOBS Act, we are not required to include a Compensation Discussion and Analysis section and have elected to comply with the scaled disclosure requirements applicable to emerging growth companies.

Compensation Overview

Our current executive compensation program is intended to align executive compensation with our business objectives and to enable us to attract, retain and reward executive officers who contribute to our long-term success. The compensation paid or awarded to our executive officers is generally based on the assessment of each individual’s performance compared against the business objectives established for the fiscal year as well as our historical compensation practices. In the case of newly hired executive officers, their compensation is primarily determined based on the negotiations of the parties as well as our historical compensation practices. For 2024, the material elements of our executive compensation program were base salary, annual cash bonuses and equity-based compensation. Our Compensation Committee engaged Pearl Meyer to assist with the evaluation of our executive compensation program.

This section provides a discussion of the compensation paid or awarded to our President, Chief Executive Officer and Chief Medical Officer and our two most highly compensated other executive officers as of December 31, 2024. We refer to these individuals as our “named executive officers”. For 2024, our named executive officers were:

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Lara Sullivan, M.D., President, Chief Executive Officer and Chief Medical Officer

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Pamela Connealy, Chief Financial Officer and Chief Operating Officer

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Ken Kobayashi, M.D., Former Chief Medical Officer

Compensation of Named Executive Officers

Base Salary. Base salaries are intended to provide a level of compensation sufficient to attract and retain an effective management team, when considered in combination with the other components of our executive compensation program. The relative levels of base salary for our named executive officers are designed to reflect each executive officer’s functional specialty and scope of responsibility and accountability with us. The Compensation Committee periodically reviews the base salaries of our executive officers, including our named executive officers, and adjusts (or, in the case of our Chief Executive Officer, may recommend adjustments for approval by the Board) as necessary to reflect changes in the scope of the executive officer’s performance, contributions, responsibilities, prior salary level, position and market conditions. The annual base salary for each of Dr. Sullivan, Ms. Connealy, and Dr. Kobayashi for the fiscal year ended December 31, 2024 was $625,000, $504,000, and $500,000, respectively. Please see the “Salary” column in the “2024 Summary Compensation Table” for the base salary amounts earned by the named executive officers in 2024.

Annual Cash Bonuses. Historically, we have provided our senior leadership team with short-term incentive compensation through our annual cash bonus plan. Annual bonus compensation holds executives accountable, rewards the executives based on actual business results and motivates our executive officers to achieve annual corporate and individual performance objectives. Our annual cash bonus plan provides cash incentive award opportunities for the achievement of annual performance goals established by the Board at the beginning of each fiscal year.

Each of our named executive officers are eligible to receive an annual performance cash bonus based on the achievement of pre-established corporate and, in the case of Ms. Connealy, and Dr. Kobayashi, individual objectives as determined by the Board and our Compensation Committee, in consultation with the Pearl Myer and upon review of the recommendations of Dr. Sullivan for our other named executive officers. Dr. Sullivan does not have individual performance objectives as she is viewed as more directly responsible for the achievement of our corporate objectives, while the other named executive officers had 20% of their bonus opportunity tied to the achievement of individual goals. The payment of awards under the 2024 annual cash bonus plan applicable to the named executive officers was subject to the attainment of corporate goals for Dr. Sullivan and a combination of corporate and individual goals, weighted 80% and 20%, respectively, for our other named executive officers. The corporate component of the annual cash bonus plan was determined based on a number of goals relating to (i) clinical development of our product pipeline, weighted 80%, (ii) preclinical support for our product candidates, weighted 10% and (iii) investor and business operations, weighted 10%. The individual goals for Ms. Connealy, and Dr. Kobayashi were pre-established goals determined based on their functional areas of responsibility.

At the beginning of the performance year, each officer is assigned a target bonus opportunity expressed as a percentage of his or her base salary. Actual bonus payments may be higher or lower than the target bonus amount, as determined by the Board and the Compensation Committee, based on the achievement of the pre-established corporate and, if applicable, individual objectives. The target bonus opportunities, as a percentage of base salary, in 2024 for Dr. Sullivan, Ms. Connealy, and Dr. Kobayashi were 60%, 45%, and 40%, respectively.

In determining the amount of the annual cash bonuses, the Compensation Committee determines the level of achievement of the corporate goals and, if applicable, individual goals for the year. In determining the level of achievement for our named executive officers other than Dr. Sullivan, the Compensation Committee also reviews and considers the recommendations of Dr. Sullivan. These achievement levels are used to determine each named executive officer’s bonus. Based on our 2024 company and individual performance, our Compensation Committee awarded payouts under our annual cash bonus program ranging from 70% to 112.5% of the target bonus opportunity.

Actual bonus amounts paid are reflected in the “Non-Equity Incentive Plan Compensation” column of the “2024 Summary Compensation Table” below.

Equity Awards. To further align the interests of our executive officers with the interests of our stockholders and to further focus our executive officers on our long-term performance, we grant equity compensation to our named executive officers. On March 26, 2024, the Compensation Committee granted stock options to Dr. Sullivan and RSUs to Ms. Connealy, which awards are scheduled to vest 25% on the first anniversary of the grant date and in 36 substantially-equal monthly installments thereafter, subject to the their continued employment through the applicable vesting date. In addition, on December 23, 2024, to align management stock ownership levels to market, the Compensation Committee granted stock options to Dr. Sullivan, and Ms. Connealy which are scheduled to fully vest on December 23, 2025, subject to the their continued employment through the vesting date.

In addition, in 2024, the Compensation Committee and the Board approved the acceleration of the portion of unvested RSUs previously granted to Dr. Sullivan and Ms. Connealy.

Please see the “Outstanding Equity Awards at Fiscal 2024 Year-End” table for further information regarding the outstanding equity awards held by each of the named executive officers.

Clawback Policy

To comply with the Dodd-Frank Act and Nasdaq listing standards, we have adopted an incentive compensation recoupment policy, or “clawback” policy, which applies to our current and former executive officers, within the meaning of Section 10D of the Exchange Act and Rule 10D-1 promulgated thereunder, who were employed by us or a subsidiary of us during the applicable recovery period. Under the policy, in the event that the financial results upon which a cash or equity-based incentive award was predicated become the subject of a financial restatement that is required because of material non-compliance with financial reporting requirements, the Compensation Committee will conduct a review of awards covered by the policy and recoup any erroneously awarded incentive-based compensation to ensure that the ultimate payout gives retroactive effect to the financial results as restated. The policy covers any cash or equity-based incentive compensation award that was paid, earned or granted to a covered officer during the last completed three fiscal years immediately preceding the date on which we are required to prepare the accounting restatement. The Company’s clawback policy was filed as an exhibit to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

2024 Summary Compensation Table

The following table shows information regarding the compensation of our named executive officers for services performed in the year ended December 31, 2024:

Outstanding Equity Awards at 2024 Fiscal Year-End

The following table presents information regarding the outstanding equity awards held by each of the named executive officers as of December 31, 2024.

Employment Agreements, Severance and Change in Control Agreements

Lara Sullivan, M.D.

We entered into an employment letter agreement with Dr. Sullivan in October 2019, which was subsequently amended in connection with our IPO and again in October 2022. Under the terms of the amended letter agreement, in the event that Dr. Sullivan is terminated by us for any reason other than for “cause” or she terminates her employment for “good reason”, she will be entitled to receive, upon execution and effectiveness of a release of claims, base salary for a period of twelve (12) months and up to twelve (12) months of continued health insurance coverage at the Company’s expense. In addition, in the event of termination by us for any reason other than for “cause” or due to “good reason” within three (3) months before or twelve (12) months following a change of control of Pyxis Oncology, subject to the execution and non-revocation of a release of claims, (i) Dr. Sullivan will receive a cash payment in an amount equal to the sum of eighteen (18) months’ base salary and Dr. Sullivan’s target annual bonus, payable in a lump sum on the 60th day following such termination of employment, unless required to be paid in installments to comply with Section 409A of the Code, (ii) up to twelve (12) months of continued health insurance coverage at our expense and (iii) any unvested portions of the stock options and stock awards granted to Dr. Sullivan will immediately vest in full on the date of termination. Dr. Sullivan’s amended letter agreement also provides for any unvested portion of stock options and stock awards granted to fully vest in the event of a change in control in which neither Pyxis Oncology nor its successor entity (if applicable) assumes, substitutes or continues the unvested portion of such award. In the event that we terminate Dr. Sullivan with “cause” or she resigns without “good reason”, then she will not be entitled to receive severance benefits. Dr. Sullivan’s letter agreement also contains IP assignment obligations.

Pamela Connealy

We entered into an employment letter agreement with Ms. Connealy in June 2021, which was subsequently amended in connection with our IPO and again in November 2022. Under the terms of the amended letter agreement, in the event that Ms. Connealy is terminated by us without “cause” or due to disability or she terminates her employment for “good reason”, she will be entitled to receive, upon execution and effectiveness of a release of claims, base salary for a period of nine (9) months and up to nine (9) months of Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”) premiums, along with a reimbursement for any taxes associated with such continued health insurance coverage. In addition, in the event of termination by us for any reason other than for “cause” or Ms. Connealy’s resignation due to “good reason” within three (3) months before or twelve (12) months following a change of control of Pyxis Oncology, subject to the execution and non-revocation of a release of claims, Ms. Connealy will receive (i) a lump sum payment equal to twelve (12) months of base salary plus Ms. Connealy’s target annual bonus, payable in a single lump sum on the 60th day following such termination of employment, (ii) up to twelve (12) months of COBRA premiums, along with a reimbursement for any taxes associated with such continued health insurance coverage, and (iii) any unvested portions of the stock options and stock awards granted to Ms. Connealy will immediately vest in full on the date of termination. Ms. Connealy’s amended letter agreement also provides for any unvested portion of stock options and stock awards granted to fully vest in the event of a change in control in which neither Pyxis Oncology nor its successor entity (if applicable) assumes, substitutes or continues the unvested portion of such award. Under the terms of the amended letter agreement, if the payments and benefits to Ms. Connealy under the amended letter agreement or another plan, arrangement or agreement would subject her to the excise tax imposed by Section 4999 of the Internal Revenue Code, then such payments will be reduced by the minimum amount necessary to avoid such excise tax, but only if such reduction will result in Ms. Connealy receiving a higher net after-tax amount.

Ken Kobayashi, M.D.

We entered into an employment letter agreement with Dr. Kobayashi in November 2023, in connection with his appointment to the position of Chief Medical Officer. Under the terms of the employment letter agreement, in the event that Dr. Kobayashi was terminated by us without “cause” or due to disability or he terminated his employment for “good reason”, he would have been entitled to receive, upon execution and effectiveness of a release of claims, base salary for a period of nine (9) months and up to nine (9) months of continued health insurance coverage at our expense, along with a reimbursement for any taxes associated with such continued health insurance coverage. In addition, in the event of termination by us for any reason other than for “cause” or Dr. Kobayashi’s resignation due to “good reason” within three (3) months before or twelve (12) months following a change of control of Pyxis Oncology, subject to the execution and non-revocation of a release of claims, Dr. Kobayashi would have received (i) a lump sum payment equal to twelve (12) months of base salary plus Dr. Kobayashi’s target annual bonus, payable in a single lump sum on the 60th day following such termination of employment, (ii) up to twelve (12) months of continued health insurance coverage at our expense, along with a reimbursement for any taxes associated with such continued health insurance coverage, and (iii) any unvested portions of the stock options and stock awards granted to Dr. Kobayashi would immediately vest in full on the date of termination. Dr. Kobayashi’s employment letter agreement also provided for any unvested portion of stock options and stock awards granted to fully vest in the event of a change in control in which neither Pyxis Oncology nor its successor entity (if applicable) assumes, substitutes or continues the unvested portion of such award. Under the terms of the amended letter agreement, if the payments and benefits to Dr. Kobayashi under the employment letter agreement or another plan, arrangement or agreement would have subjected him to the excise tax imposed by Section 4999 of the Code, then such payments would have been reduced by the minimum amount necessary to avoid such excise tax, but only if such reduction would have resulted in Dr. Kobayashi receiving a higher net after-tax amount.

In connection with his separation in March 2025, Dr. Kobayashi and the Company entered into a Separation Agreement and General Release (the “Kobayashi Separation Agreement”), pursuant to which Dr. Kobayashi will receive the severance benefits provided under his employment letter agreement for a termination without “cause.” Pursuant to the Kobayashi Separation Agreement, Mr. Kobayashi is subject to a one-year post-separation non-solicitation provision and both parties are subject to a one-year post-separation non-disparagement provision.

Non-Qualified Deferred Compensation Plan

In May 2024, the Board approved the Deferred Compensation Plan (“the NQDC Plan”). The NQDC Plan was made available to certain eligible employees and the Company’s non-employee directors, and allows those who elect to participate to defer the settlement of certain RSUs to a future period. Under the NQDC Plan, the Compensation Committee has the authority to provide that participants’ accounts will be deemed invested in notional investments other than shares of Company common stock. No such notional investment options are currently available under the NQDC Plan.

Retirement Plan

We maintain the Pyxis Oncology 401(k) Plan (the “401(k) Plan”), a qualified 401(k) savings plan that provides participants with an opportunity to save for retirement on a tax advantaged basis. Eligible employees, including our named executive officers, are able to contribute 100% of his or her eligible compensation up to the maximum amount allowed under Internal Revenue Service guidelines. Currently, we match 50% of each eligible employee’s contributions up to 6% of total eligible compensation. Contributions are allocated to each participant’s individual account and are then invested in selected investment alternatives according to the participants’ directions. The 401(k) Plan currently does not offer the ability to invest in our securities. Employees are immediately and fully vested in their contributions.

Employee Stock Purchase Plan

We maintain an employee stock purchase plan (the “ESPP”), which is designed to allow our eligible employees to purchase shares of our common stock at designated intervals at a discounted price of 15% through payroll deductions or other contributions. Employees who are United States tax residents may benefit from favorable tax treatment as the ESPP is intended to quality as an employee stock purchase plan under Section 432 of the Code.

Compensation Risk Assessment

We conducted an assessment of the risks associated with our compensation practices and policies, and determined that risks arising from such policies and practices are not reasonably likely to have a material adverse effect on us. In conducting the assessment, we undertook a review of our compensation philosophies, our compensation governance structure and the design and oversight of our compensation programs. Overall, we believe that our programs include an appropriate mix of fixed and variable features, and short- and long-term incentives with compensation-based goals aligning with corporate goals.

Policies and Practices Regarding Long-Term Incentive Awards

It is the Compensation Committee’s practice to generally approve ordinary course annual equity grants at approximately the same time each year following our release of full-year financial results. As in prior years, the Compensation Committee granted annual equity awards to our named executive officers in March 2024 after we announced our financial results for fiscal 2023 and the Compensation Committee had the opportunity to consider our expectations and projections for fiscal 2024. In addition, while we generally make broad-based long-term incentive grants at approximately the same time each year following our release of full-year financial results, we may choose to make long-term incentive grants outside of the annual broad-based grant (e.g., as a retention grant). As noted above, in 2024, the Compensation Committee granted stock option awards to the named executive officers in December 2024. Stock options may be granted only with an exercise price at or above the closing market price of the Company’s common stock on the date of grant.

Because the Compensation Committee’s fiscal 2024 regular meeting schedule was determined in the prior fiscal year, the proximity of any awards to other significant corporate events is coincidental. The Company does not schedule its equity grants in anticipation of the release of material non-public information (“MNPI”) nor does the Company time the release of MNPI based on equity grant dates.

The following table presents information regarding stock options issued to our named executive officers in 2024 during any period beginning four business days before the filing or furnishing of a periodic report or current report disclosing MNPI and ending one business day after the filing or furnishing of such report with the SEC.

(1)

On March 27, 2024, the Company filed Form 8-Ks (i) disclosing that the Company entered into an agreement with Novartis Technology LLC for the sale of its rights to royalties from the commercialization of Beovu® (brolucizumab-dbll) and another asset, and (ii) to update certain unaudited pro forma financial information of the Company for purposes of incorporating such information by reference into one or more registration statements filed or to be filed by the Company. This percentage is calculated using the closing price of a share of the Company’s common stock on March 26, 2024 and March 28, 2024 of $3.83 and $4.26, respectively.