Filana Therapeutics Inc

This management proposal asks shareholders to approve Amendment No. 2 to the Company’s 2018 Omnibus Incentive Plan to increase the share reserve by 4,000,000 shares (from 5,000,000 to 9,000,000), extend the plan term through January 31, 2030, and adopt several governance-oriented changes including an explicit prohibition on repricing without stockholder approval and lower per-person and director award caps. Management frames the request as necessary to allow the Company to grant equity awards at a level consistent with its goal of positioning compensation around the 50th percentile of peers and to avoid a competitive disadvantage in attracting and retaining scientific and operational talent. The filing documents that roughly 90% of the current reserve has been granted or reserved and only ~522,022 shares remain available, so without approval the company expects constrained ability to grant equity over the next 12 months. The proposed governance changes—reduced annual individual limits, reduced non‑employee director equity and total compensation caps, and anti‑repricing language—are presented as enhancements intended to align the plan with investor expectations and proxy‑advisor standards. The Board’s recommendation is supported by an analysis of dilution (estimated aggregate dilution after the amendment of ~7.6%), and by operational context that recent hiring and program expansion (e.g., TSC-related epilepsy work) require additional long‑term incentives. The proposal also includes adjustments to director and officer award limits and references to clawback and whistleblower protections, signaling management’s attempt to balance increased share authorization with tightened governance controls. Approving the amendment would enable the Compensation Committee to continue issuing options and other equity awards to key employees and directors; rejection would preserve current limits but likely constrain grant activity and could impede retention and recruitment. Investors evaluating this proposal should weigh near-term dilution and the size of the requested increment against the Company’s stage, talent needs, recent governance concessions, and the company’s stated intent to use equity as a critical retention and alignment tool.

This management proposal requests a non‑binding advisory endorsement of the Company’s 2025 executive compensation as disclosed in the proxy (a say‑on‑pay vote). Management explains that the compensation program for named executive officers is composed of base salary, cash bonuses tied to pre‑established corporate goals and long‑term equity awards, and that compensation decisions were informed by an independent consultant (Pearl Meyer) and a peer group benchmarking exercise. For 2025 the Compensation Committee determined bonuses at 100% of target based on achievement of goals tied to advancing the simufilam program into a new indication (TSC-related epilepsy) and organizational priorities, and granted options that were constrained by the then‑available plan share reserve. The Board notes changes to base salaries effective January 1, 2026 and describes governance measures (e.g., clawback policy, engagement with consultants) intended to mitigate compensation‑related risk. Although advisory and non‑binding, the Board will consider the vote’s outcome in future compensation decisions; a negative result could prompt further engagement or changes to pay practices. Investors should consider the mix of cash and equity, the peer benchmarking, the company’s stage and clinical and regulatory milestones, and the Compensation Committee’s responsiveness to prior shareholder feedback (including a prior 79% approval) when deciding how to vote. The Board recommends a vote FOR, arguing that current programs support retention, align pay with long‑term shareholder value and incorporate governance safeguards.