UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934

(Amendment No.    )

Filed by the Registrant ☒

Filed by a Party other than the Registrant ☐

Check the appropriate box:

AVID BIOSERVICES, INC.

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

2024

Annual Meeting of Stockholders

Notice and Proxy Statement

October 16, 2024

10:00 a.m. (Pacific time)

AVID BIOSERVICES, INC.

Dear Fellow Stockholders,

We are pleased to invite you to attend the 2024 annual meeting of stockholders of Avid Bioservices, Inc. to be held on October 16, 2024, at 10:00 a.m., Pacific time, exclusively online via the internet as a virtual web conference at www.virtualshareholdermeeting.com/CDMO2024. The meeting will be held for the following purposes:

Our Board of Directors has fixed the close of business on August 20, 2024 as the record date for the 2024 annual meeting. Only stockholders of record at the close of business on August 20, 2024 are entitled to notice of and to vote at the 2024 annual meeting. Further information about voting rights and the matters to be voted upon is presented in the accompanying proxy statement.

The 2024 annual meeting will only be held in a virtual format via the Internet. You will be able to participate in the 2024 annual meeting online by visiting www.virtualshareholdermeeting.com/CDMO2024. You will also be able to vote your shares electronically at the 2024 annual meeting.

On or about September 6, 2024, we expect to mail to our stockholders of record as of the record date a Notice of Internet Availability of Proxy Materials (the “Notice”) containing instructions on how to access our proxy statement and our annual report. The Notice also provides instructions on how to vote via the Internet or by telephone and includes instructions on how to receive a paper copy of our proxy materials by mail. The accompanying proxy statement and our annual report can be accessed directly at www.proxyvote.com.

YOUR VOTE IS IMPORTANT. Whether or not you plan to attend the 2024 annual meeting online, we urge you to submit your vote via the Internet, telephone or mail as soon as possible so that your shares can be voted at the 2024 annual meeting in accordance with your instructions.

Very truly yours,

Notice of Annual Meeting of Stockholders

To the Stockholders of Avid Bioservices, Inc.:

You are invited to attend the 2024 Annual Meeting of Stockholders, which we refer to as the “Annual Meeting,” of Avid Bioservices, Inc., a Delaware corporation, which we refer to as “we,” “us,” “our,” the “Company” and “Avid,” on October 16, 2024, at 10:00 a.m., Pacific time. The Annual Meeting will be held exclusively online via the Internet as a virtual web conference at www.virtualshareholdermeeting.com/CDMO2024, for the following purposes:

The record date for the Annual Meeting is August 20, 2024. Only stockholders of record at the close of business on that date may attend the Annual Meeting, submit questions, and vote at the Annual Meeting and at any adjournment or postponement thereof. If your brokerage firm, bank, broker-dealer, trustee or other nominee is the holder of record of your shares (i.e., your shares are held in “street name”), you will receive voting instructions from the holder of record. You must follow these instructions for your shares to be voted. We recommend that you vote, or instruct your brokerage firm, bank, broker-dealer, trustee or other nominee, by following those instructions, to vote, FOR all the nominees named in Proposal No. 1 and FOR Proposal Nos. 2, 3, 4 and 5. A list of our stockholders as of the close of business on August 20, 2024 will be available for inspection during business hours for a period of ten days ending on the day prior to the Annual Meeting at our principal executive offices located at 14191 Myford Road, Tustin, California 92780.

The accompanying Proxy Statement provides detailed information about the matters to be considered at the Annual Meeting. It is important that your voice be heard and your shares be represented at the Annual Meeting whether or not you are personally able to virtually attend. Even if you plan to attend the Annual Meeting online, we urge you to submit your vote via the Internet, telephone or mail as soon as possible so that your shares can be voted at the Annual Meeting in accordance with your instructions.

Our Board of Directors UNANIMOUSLY RECOMMENDS VOTING FOR THE ELECTION OF EACH OF THE SEVEN NOMINEES NAMED IN PROPOSAL NO. 1 AND FOR PROPOSAL NOS. 2, 3, 4 AND 5.

Regardless of the number of shares of Common Stock of the Company that you own, your vote is important. Thank you for your continued support, interest and investment in Avid.

Tustin, California

August 28, 2024

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING TO BE HELD ON OCTOBER 16, 2024 AT 10:00 a.m. pACIFIC TIME AT WWW.VIRTUALSHAREHOLDERMEETING.COM/CDMO2024: THE PROXY STATEMENT FOR THE ANNUAL MEETING AND THE ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED APRIL 30, 2024 ARE AVAILABLE FREE OF CHARGE AT WWW.PROXYVOTE.COM.

AVID BIOSERVICES, INC.

Proxy Statement For Annual Meeting Of Stockholders

This Proxy Statement is furnished in connection with the solicitation of proxies by the Board of Directors of Avid Bioservices, Inc., a Delaware corporation, to be used at the 2024 Annual Meeting of Stockholders of the Company, which we refer to as the “Annual Meeting”, and which will be on October 16, 2024, at 10:00 a.m., Pacific time, and at any adjournment or postponement thereof. The Annual Meeting will be held exclusively online via the Internet as a virtual web conference at www.virtualshareholdermeeting.com/CDMO2024. Only stockholders of record at the close of business on August 20, 2024, which we refer to as the “record date”, will be entitled to vote at the Annual Meeting. The Notice of Internet Availability of Proxy Materials, which we refer to as the “Notice”, containing instructions on how to access this Proxy Statement and the Annual Report on Form 10-K for the fiscal year ended April 30, 2024, which we refer to as the “Annual Report”, is being mailed to stockholders of record as of August 20, 2024 on or about September 6, 2024. We may send you a proxy card, along with a second Notice, on or after September 16, 2024.

Holders of our common stock, $0.001 par value per share (“Common Stock”), at the close of business on August 20, 2024 will be entitled to vote at the Annual Meeting. As of August 20, 2024, 63,795,108 shares of our Common Stock were issued and outstanding and entitled to vote. Stockholders are entitled to one vote for each share of Common Stock held. A majority, or at least 31,897,555, of these shares, present in person or represented by proxy at the Annual Meeting, will constitute a quorum for the transaction of business.

The Notice, this Proxy Statement, the proxy card and the Annual Report are also available at www.proxyvote.com. Web links and addresses contained in this Proxy Statement are provided for convenience only, and the content on the referenced websites does not constitute a part of this Proxy Statement.

All references in this Proxy Statement to “Avid”, the “Company”, “we”, “us” and “our” refer to Avid Bioservices, Inc. References to the “Board of Directors” or “Board” refer to the Board of Directors of Avid.

QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING

Why am I receiving these materials?

The Board is soliciting your proxy to vote at the Annual Meeting, including at any adjournments or postponements of the meeting. At the Annual Meeting, the Company asks you to vote on five proposals:

Proposal No. 1: to elect seven directors to serve on our Board of Directors until our 2025 annual meeting of stockholders, with each director to hold office until his or her successor is duly elected and qualified or until his or her earlier death, resignation or removal;

Proposal No. 2: to ratify the appointment of Ernst & Young LLP as the independent registered public accounting firm of the Company for the fiscal year ending April 30, 2025;

Proposal No. 3: to approve, by an advisory vote, a non-binding resolution approving the compensation of the Company’s named executive officers, as described in this Proxy Statement under “Compensation Discussion and Analysis” and “Executive Compensation”;

Proposal No. 4: to approve an amendment to our 2018 Omnibus Incentive Plan to increase the number of shares reserved thereunder; and

Proposal No. 5: to approve an amendment to our 2010 Employee Stock Purchase Plan (the “ESPP”) to remove the expiration date so that the ESPP does not expire.

The Board may also ask you to participate in the transaction of any other business that is properly brought before the Annual Meeting in accordance with the provisions of our Restated Certificate of Incorporation (the “Charter”) and Amended and Restated Bylaws (the “Bylaws”).

You are receiving this Proxy Statement because you were a stockholder of the Company as of the close of business on August 20, 2024, the record date for purposes of determining the stockholders entitled to receive notice of and vote at the Annual Meeting. As further described below, we request that you promptly vote via the Internet, telephone or mail.

Whether or not you participate in the Annual Meeting, it is important that you vote your shares.

Why did I receive a Notice of Internet Availability of Proxy Materials (the “Notice”) instead of a full set of proxy materials?

In accordance with the rules of the Securities and Exchange Commission (the “SEC”), we have elected to furnish our proxy materials, including this Proxy Statement and our Annual Report, primarily via the Internet. Stockholders may request to receive proxy materials in printed form by mail or electronically by e-mail by following the instructions contained in the Notice. We encourage stockholders to take advantage of the availability of our proxy materials on the Internet to help reduce the environmental impact of our annual meetings of stockholders.

How do I attend the virtual Annual Meeting?

To participate in the virtual Annual Meeting, visit www.virtualshareholdermeeting.com/CDMO2024 on October 16, 2024 and enter your control number included on your proxy card, your Notice, or the instructions included with your proxy materials. The meeting will begin promptly at 10:00 a.m., Pacific time, on October 16, 2024. Online access will begin 15 minutes prior to the start of the meeting. If you are unable to locate your control number, you will be able to login as a guest. However, if you login as a guest, you will not be able to vote your shares or ask questions during the meeting.

The virtual meeting platform is supported across most Internet browsers and devices (desktop computers, laptop computers, tablets, and smart phones) running updated versions of applicable software and plugins. Stockholders should ensure that they have a strong WiFi connection wherever they intend to participate in the meeting. Stockholders should also give themselves plenty of time to log in and ensure that they can hear streaming audio prior to the start of the meeting.

Can I ask a question at the virtual Annual Meeting?

Yes, you will be able to submit questions electronically during the Annual Meeting by using the “Ask a Question” field during the webcast if you have logged in using your control number on your proxy card or Notice. After entering your control number, you may also submit a question prior to the meeting on the voting website at www.proxyvote.com by selecting the “Question for Management” field.

During the live question and answer session of the meeting, members of our executive leadership team will answer appropriate questions that comply with the rules of conduct for the Annual Meeting, as time permits. To ensure the meeting is conducted in a manner that is fair to all stockholders, the Chair of the meeting (or such other person designated by our Board), may exercise broad discretion in recognizing stockholders who wish to participate, the order in which questions are asked and the amount of time devoted to any one question. However, we reserve the right to edit or reject questions that are not germane to the business of the Annual Meeting or are otherwise not in compliance with the rules of conduct for the Annual Meeting. During the meeting, details for submitting written questions will be available at www.virtualshareholdermeeting.com/CDMO2024.

What do I do if I have technical difficulties during the virtual Annual Meeting?

If you have any difficulties accessing the virtual meeting during the check-in or meeting time, please call the technical support number that will be posted on the virtual Annual Meeting login page.

Who is soliciting my vote?

In this Proxy Statement, the Board is soliciting your vote.

Will there be any other items of business on the agenda?

If any other items of business or other matters are properly brought before the Annual Meeting, your proxy gives discretionary authority to the persons named on the proxy card concerning those items of business or other matters. The persons named on the proxy card intend to vote the proxy in accordance with their best judgment. Our Board of Directors does not intend to bring any other matters to be voted on before the Annual Meeting, and we are not currently aware of any matters that may be properly presented by others for consideration at the Annual Meeting.

How does the Board recommend that I vote?

The Board unanimously recommends that you vote as follows:

Who can vote?

Holders of our Common Stock at the close of business on August 20, 2024, the record date, may vote at the Annual Meeting. At the close of business on that date, there were 63,795,108 shares of our Common Stock outstanding and entitled to vote. 

Is my vote confidential?

Proxies, ballots and voting tabulations are handled on a confidential basis to protect your voting privacy. This information will not be disclosed, except as necessary to meet applicable legal requirements, to allow for the tabulation of votes and certification of the vote, or to facilitate a successful proxy solicitation.

What is the difference between holding shares as a stockholder of record and as a beneficial owner?

Stockholder of Record: Shares Registered in Your Name. If, at the close of business on the record date, your shares were registered directly in your name, then you are the stockholder of record for these shares. As the stockholder of record, you may vote either online at the Annual Meeting or by proxy.

Beneficial Owners: Shares Registered in “Street Name”. If, at the close of business on the record date, your shares were held, not in your name, but rather in a stock brokerage account or by a bank or other nominee on your behalf, then you are considered the beneficial owner of shares held in “street name.” As the beneficial owner, you have the right to direct your brokerage firm, bank, broker-dealer, trustee or other nominee how to vote your shares by following the voting instructions your brokerage firm, bank, broker-dealer, trustee or other nominee provides. If you do not provide your brokerage firm, bank, broker-dealer, trustee or other nominee with instructions on how to vote your shares, your brokerage firm, bank, broker-dealer, trustee or other nominee may, in its discretion, vote your shares with respect to routine matters but may not vote your shares with respect to any non-routine matters. Please see “What happens if I do not vote?” for additional information.

How do I vote if I am the stockholder of record?

If you are the stockholder of record, you can vote in the following ways:

Even if you plan to participate in the Annual Meeting online, we recommend that you vote by proxy so that your votes will be counted if you later decide not to participate in the Annual Meeting.

How do I vote if my shares are held in “street name”?

If you hold your shares beneficially in street name through a nominee (such as a brokerage firm, bank, broker-dealer or trustee), you should have received a voting instruction form with these materials from your nominee rather than us. You should follow the instructions you receive from your nominee to vote these shares.

If you do not provide voting instructions to your brokerage firm, bank, broker-dealer, trustee or other nominee holding shares of our Common Stock for you, your shares will not be voted with respect to Proposal Nos. 1 (election of directors), 3 (advisory vote to approve executive compensation), 4 (approval of an amendment to our 2018 Omnibus Incentive Plan to increase the number of shares reserved thereunder) and 5 (approval of an amendment to our ESPP to remove the expiration date so that the ESPP does not expire), as brokerage firms, banks, broker-dealers or other nominees do not have discretion to vote on non-routine matters. We therefore encourage you to provide voting instructions on a proxy card or a provided voting instruction form to the brokerage firm, bank, broker-dealer, trustee or other nominee that holds your shares by carefully following the instructions provided in their notice to you.

Electronic voting will be possible during the meeting for anyone who wants to vote during the meeting. If you hold your shares in street name, you must request a legal proxy from your brokerage firm, bank, broker-dealer, trustee or other nominee to vote during the meeting.

How many votes do I have?

Stockholders are entitled to one vote for each share of Common Stock held.

Whfat happens if I do not vote?

Stockholders of Record

If you are a stockholder of record and do not vote by completing and returning your proxy card, by telephone, through the internet or online at the Annual Meeting, your shares will not be voted. If you return a validly executed proxy card without indicating how your shares should be voted on a matter and you do not revoke your proxy, your proxy will be voted: FOR the election of each of the seven named director nominees set forth on the proxy card (Proposal No. 1); FOR the ratification of the appointment of Ernst & Young LLP as the independent registered public accounting firm of the Company for the fiscal year ending April 30, 2025 (Proposal No. 2); FOR the approval, by an advisory vote, of a non-binding resolution approving the compensation of the Company’s named executive officers, as described in this Proxy Statement under “Compensation Discussion and Analysis” and “Executive Compensation” (Proposal No. 3); FOR the approval of an amendment to our 2018 Omnibus Incentive Plan to increase the number of shares reserved thereunder (Proposal No. 4) and FOR the approval of an amendment to our ESPP to remove the expiration date so that the ESPP does not expire (Proposal No. 5).

Beneficial Owners

If you are a beneficial owner of shares held in street name and you do not instruct your broker, bank or other agent how to vote your shares, your broker, bank or other agent may still be able to vote your shares in its discretion. Brokers, banks and other securities intermediaries may use their discretion to vote your “uninstructed” shares with respect to matters considered to be “routine,” but not with respect to “non-routine” matters. In this regard, Proposal Nos. 1, 3, 4, and 5 are considered to be “non-routine,” meaning that your broker may not vote your shares on those proposals in the absence of your voting instructions. Proposal No. 2 is considered to be a “routine” matter, meaning that if you do not return voting instructions to your broker by its deadline, your shares may be voted by your broker on this proposal in its discretion.

If you are a beneficial owner of shares held in street name, and you do not plan to attend and vote at the Annual Meeting, in order to ensure your shares are voted in the way you would prefer, you must provide voting instructions to your broker, bank or other agent by the deadline provided in the materials you receive from your broker, bank or other agent.

What are “broker non-votes”?

As discussed above, when a beneficial owner of shares held in street name does not give voting instructions to their broker, bank or other securities intermediary holding their shares as to how to vote on matters deemed to be “non-routine,” the broker, bank or other such agent cannot vote the shares. When there is at least one “routine” matter that the broker, bank or other securities intermediary votes on, the shares that are un-voted on “non-routine” matters are counted as “broker non-votes.” Proposal No. 2 is considered a “routine” matter and we therefore expect brokers, banks or other securities intermediaries to vote on that proposal. Proposal Nos. 1, 3, 4, and 5 are considered to be “non-routine” and we therefore expect broker non-votes to exist in connection with those proposals.

What vote is required with respect to the proposals?

For Proposal No. 1, the seven director nominees receiving the most “FOR” votes at the Annual Meeting will be elected. The proxy card enables a stockholder to vote “FOR” or “WITHHOLD” from voting as to each person nominated by the Board. Only “FOR” votes will affect the outcome of Proposal No. 1.

Proposal Nos. 2 and 3 will be decided by the affirmative vote of a majority of the stock represented and entitled to vote on the subject matter. A stockholder may vote “FOR,” “AGAINST” or “ABSTAIN” on these proposals. If you “ABSTAIN” from voting it will have the same effect as an “AGAINST” vote. Broker non-votes (on Proposal No. 3) will have no effect.

Pursuant to our Bylaws and Nasdaq Listing Rules, to be approved, Proposal Nos. 4 and 5 must receive “FOR” votes from a majority of the votes cast on the proposal. Abstentions and broker non-votes will have no effect on these proposals.

Who is paying for this proxy solicitation?

We will bear the costs of soliciting proxies for the Annual Meeting. These costs will include, among other items, the expense of preparing, assembling, printing and mailing the proxy materials to stockholders of record and beneficial owners, and reimbursements paid to a brokerage firm, bank, broker-dealer, trustee or other nominee for their reasonable out-of-pocket expenses for forwarding proxy materials to stockholders and obtaining beneficial owner’s voting instructions. In addition to soliciting proxies by mail, our directors, officers and employees may solicit votes, without additional compensation, personally, by telephone, or by other appropriate means.

If I have already voted by proxy, can I still change my vote?

Yes. You may change your vote at any time prior to the taking of the vote at the Annual Meeting. If you are the stockholder of record, you may change your vote by (i) granting a new proxy bearing a later date (which automatically revokes the earlier proxy) using any of the methods described above (and until the applicable deadline for each method), (ii) providing a written notice of revocation to our corporate secretary at Avid Bioservices, Inc., 14191 Myford Road, Tustin, California 92780, Attn: Corporate Secretary, prior to your shares being voted, or (iii) attending the Annual Meeting online and voting online as instructed above. Attendance at the virtual meeting will not cause your previously granted proxy to be revoked unless you vote online at the Annual Meeting as instructed above. If you hold your shares in “street name”, you must request a legal proxy from your bank or broker to vote during the meeting. We strongly urge you to vote by proxy FOR each of the seven nominees named in Proposal No. 1 and “FOR” Proposal Nos. 2, 3, 4 and 5. Only your latest dated proxy will count at the Annual Meeting.

What constitutes a quorum?

A quorum is the minimum number of shares required to be present at the Annual Meeting for the meeting to be properly held under our Bylaws and Delaware law. A majority of the issued and outstanding shares of our Common Stock entitled to vote at the Annual Meeting must be present in person or represented by proxy to constitute a quorum for the transaction of business at the Annual Meeting. Votes withheld, abstentions and broker non-votes will be counted as present or represented for purposes of determining the presence or absence of a quorum for the Annual Meeting. In the absence of a quorum, the Annual Meeting may be adjourned by a majority of the shares entitled to vote present in person or by proxy or by the representative of the Company presiding over the meeting.

What is “Householding” of Annual Meeting materials?

Some “street name” holders may be “householding” our notices of Internet availability of proxy statements, proxy statements and annual reports. This means that only a single copy of these materials may have been sent to two or more stockholders sharing the same address. We will promptly deliver a separate copy of any such document to you if you call or write us at our principal executive offices, 14191 Myford Road, Tustin, California, 92780, Attn: Investor Relations, telephone: (800) 987-8256. If you would like to receive separate copies of any of these materials in the future, or if you are receiving multiple copies and would like to receive only one copy per household, please notify your brokerage firm, bank, broker-dealer, trustee or other nominee if your shares are held in “street name”, or you may contact us at the above address and telephone number.

How can I find out the results of the voting at the Annual Meeting?

Preliminary voting results are expected to be announced at the Annual Meeting. Final voting results will be published in a Current Report on Form 8-K to be filed with the Securities and Exchange Commission (“SEC”) within four business days after the Annual Meeting. If final voting results are not available to us in time to file a Current Report on Form 8-K within four business days after the Annual Meeting, we intend to file a Current Report on Form 8-K to publish preliminary results and, within four business days after the final results are known to us, file an additional Current Report on Form 8-K to publish the final results.

Who will count the votes?

The votes will be counted, tabulated and certified by the inspector of elections for the Annual Meeting, who shall be duly appointed by the Board.

What is the deadline to propose actions for consideration at next year’s annual meeting of stockholders?

Stockholder proposals may be included in our proxy materials for an annual meeting so long as they are provided to us on a timely basis and satisfy the other conditions set forth in applicable SEC rules. For a stockholder proposal to be included in our proxy materials for the 2025 annual meeting of stockholders, the proposal must be received at our principal executive offices at 14191 Myford Road, Tustin, California 92780, addressed to the Corporate Secretary, no later than May 9, 2025, and must comply with all applicable requirements of Rule 14a-8 promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). However, if our 2025 annual meeting of stockholders is not held between September 16, 2025 and November 15, 2025, then the deadline will be a reasonable time prior to the time we begin to print and send our proxy materials.

Stockholder business that is not intended for inclusion in our proxy materials may be brought before the 2025 annual meeting so long as we receive notice of the proposal as specified by our Bylaws, addressed to the Corporate Secretary at our principal executive offices at 14191 Myford Road, Tustin, California 92780, by not earlier than the close of business on June 18, 2025 and not later than the close of business on July 18, 2025. However, if the 2025 annual meeting of stockholders is not held between September 16, 2025 and November 15, 2025, the notice must be delivered no earlier than the close of business on the 120th day nor later than the close of business on the 90th day prior to the 2025 annual meeting of stockholders or, if later, the 10th day following the day on which public disclosure of the date of the 2025 annual meeting of stockholders is made. All such notices must be submitted in accordance with the specific procedural requirements in our Bylaws and must include certain information with regard to the person submitting the proposal. Failure to comply with our Bylaw procedures and deadlines may preclude presentation of the proposal at our 2025 annual meeting of stockholders.

In addition to satisfying the deadlines in the “advance notice” provisions of our Bylaws, a stockholder who intends to solicit proxies in support of nominees submitted under these “advance notice” provisions, to comply with the universal proxy rules, stockholders who intend to solicit proxies in support of director nominees other than Company’s nominees must include in their notice the information required by Rule 14a-19 under the Exchange Act.

Whom should I call if I have questions about the Annual Meeting?

If you have any questions or if you need additional copies of the proxy materials, please call 1-800-690-6903 or log on to www.proxyvote.com.

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING TO BE HELD ON OCTOBER 16, 2024 AT 10:00 A.M. PACIFIC TIME AT www.virtualshareholdermeeting.com/CDMO2024: THE PROXY STATEMENT FOR THE ANNUAL MEETING AND THE ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED APRIL 30, 2024 ARE AVAILABLE FREE OF CHARGE AT WWW.PROXYVOTE.COM.

Our Board of Directors currently consists of seven directors and there are seven nominees for election to the Board of Directors at the Annual Meeting.

All directors are elected annually and serve until our next annual meeting of stockholders, with each director to hold office until his or her successor is duly elected and qualified or until his or her earlier death, resignation or removal.

Our Board of Directors has proposed the following nominees for election as directors, each of whom is a current member of our Board of Directors and has consented to serve as a director for an additional term if elected: Esther M. Alegria, Ph.D., Joseph Carleone, Ph.D., Nicholas S. Green, Richard B. Hancock, Catherine J. Mackey, Ph.D., Gregory P. Sargen and Jeanne A. Thoma. The Board of Directors recommends that you vote “FOR” the election of each of our nominees to serve as a director of the Company until the next annual meeting, with each director to hold office until his or her successor is duly elected and qualified or until his or her earlier death, resignation or removal. If any nominee is unable or declines to serve as a director at the time of the Annual Meeting, the proxies will be voted for any nominee designated by the present Board to fill the vacancy. We do not expect that any nominee will be unable or, if elected, will decline to serve as a director.

Considerations in Evaluating Director Nominees

The Corporate Governance Committee of the Board of Directors is directed under its charter to identify qualified individuals to become directors, and to recommend individuals it identifies to the Board of Directors for nomination. The Company’s Corporate Governance Guidelines establish criteria for membership on the Board. Under these criteria, the Corporate Governance Committee seeks to identify a diverse group of candidates for the Board. These candidates should possess strength of character, mature judgment, familiarity with the Company’s business and industry, independence of thought and an ability to work collegially and be committed to representing the long-term interests of the stockholders. The Corporate Governance Committee considers all factors it deems appropriate, which may include tenure, existing commitments to other businesses, potential conflicts of interest with other pursuits, legal considerations such as antitrust issues, corporate governance background, various and relevant career experience, relevant technical skills, relevant business or government acumen, financial and accounting background, executive compensation background, and other relevant factors deemed relevant to creating a diverse Board. The Corporate Governance Committee does not assign specific weight to particular criteria and not all criteria apply to every candidate.

Board Diversity Matrix

The Board Diversity Matrix below provides an enhanced disclosure regarding the diversity of the members and nominees of our Board of Directors. Each of the categories listed in the below table has the meaning as it is used in The Nasdaq Stock Market LLC (“Nasdaq”) Listing Rule 5605(f).

Director Skills and Experience

We continually evaluate our director skillsets and expertise for alignment with Avid’s strategic goals. Our directors bring extensive experience in areas that are critical to the Company’s strategy and long-term success, such as contract development and manufacturing organization (“CDMO”) business and operational experience, strategic planning and finance. Below we highlight the key skills and experiences of our director nominees that are critical to Avid’s success and which the Corporate Governance Committee considered when evaluating each director’s experience and qualifications to serve as a director. Each mark indicates a strength that was self-selected by each director. Additional information about each director’s background and business experience is provided below in the biographical information.

Following its evaluation of the seven nominees, the Corporate Governance Committee voted to recommend the nominees to the Board of Directors as candidates for election to a new term in office. The Board believes that as a group the Board consists of a sufficiently diverse group in terms of experience, knowledge and abilities to allow the Board to fulfill its responsibilities to the stockholders and the Company. As such, and based in part on the Corporate Governance Committee’s evaluation and recommendation, the Board of Directors has concluded that it is in our best interest and the best interest of our stockholders for each of the proposed nominees to serve as a member of our Board of Directors.

Nominees

Information with respect to the number of shares of Common Stock beneficially owned by each director as of August 15, 2024 appears under the heading “Security Ownership of Certain Beneficial Owners, Directors and Management.” The name, age, years of service on our Board of Directors, and principal occupation and business experience of each director nominee is set forth below.

NOMINEE BIOGRAPHIES

Recommendation of the Board of Directors

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE ELECTION TO THE BOARD OF EACH OF THE SEVEN NOMINEES NAMED ABOVE IN THIS PROPOSAL NO. 1.

Corporate Governance

Our Board of Directors strongly believes in good corporate governance policies and practices. We expect to continue to seek and implement those corporate governance practices that we believe will promote a high level of performance from our Board of Directors, officers and employees. This section describes key corporate governance guidelines and practices that our Board of Directors has adopted. Copies of the following corporate governance documents are posted on our website at http://ir.avidbio.com/corporate-governance: (1) Code of Business Conduct and Ethics; (2) Amended and Restated Charter of the Compensation Committee of the Board of Directors; (3) Charter of the Audit Committee of the Board of Directors; (4) Charter of the Corporate Governance Committee of the Board of Directors; and (5) Corporate Governance Guidelines. If you would like a printed copy of any of these corporate governance documents, please send your request to Avid Bioservices, Inc., Attention: Corporate Secretary, 14191 Myford Road, Tustin, California 92780.

Board of Directors

Our business is managed under the direction of our Board of Directors pursuant to the General Corporation Law of the State of Delaware and our Bylaws. Our Board of Directors has responsibility for establishing broad corporate policies and reviewing our overall performance. Among the primary responsibilities of our Board of Directors is the oversight of the management of our Company. Our directors remain informed of our business and management activities by reviewing documents provided to them before each meeting of the Board of Directors and by attending presentations made by our Chief Executive Officer and other members of management. The Board of Directors held four meetings during the fiscal year ended April 30, 2024. Each incumbent director attended at least seventy-five percent (75%) of the meetings of the Board and of the committees on which he or she served during the fiscal year ended April 30, 2024. In addition, members of the Board of Directors have access to our books, records and reports and independent auditors and advisors. Members of our management frequently interact with and are at all times available to our Board of Directors.

Director Independence

Under Nasdaq Listing Rule 5605(a)(2), a director will not be considered an “independent director” if such director at any time during the past three years was an employee of the Company, or if a director (or a director’s family member) accepted compensation from the Company (other than compensation for board or committee service, compensation paid to a family member who is an employee of the Company, or benefits under a tax-qualified retirement plan, or non-discretionary compensation) in excess of $120,000 during any twelve consecutive month period within the three years preceding the determination of independence. In addition, a director will not qualify as an “independent director” if, in the opinion of our Board of Directors, that person has a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. Our Board has affirmatively determined, after considering all of the relevant facts and circumstances, that all of the directors, other than Nicholas S. Green our President and Chief Executive Officer, are independent from our management under the standards set forth in the Company’s Corporate Governance Guidelines, which incorporates the independence standards required by Nasdaq Listing Rule 5605(a)(2). This means that none of the independent directors have any direct or indirect material relationship with the Company, either directly or as a partner, stockholder or officer of an organization that has a relationship with the Company.

Our Audit, Compensation and Corporate Governance Committees are composed entirely of independent directors as required by applicable SEC and Nasdaq rules. In addition, there are no family relationships among any of the directors or executive officers of the Company. Further, each member of our Compensation Committee is a “non-employee director” under Section 16 of the Exchange Act.

Meetings of Independent Directors

The independent members of our Board of Directors have a practice of meeting in executive sessions without the presence of any members of Avid’s management. In accordance with the Corporate Governance Guidelines, the independent members of the Board of Directors are generally scheduled to meet in executive session each time the Board of Directors holds its regularly scheduled meetings and otherwise as needed.

Committees of Our Board of Directors

The Board of Directors has three standing committees: the Compensation Committee, the Audit Committee, and the Corporate Governance Committee. Each of the three committees maintains a written charter approved by the Board of Directors. Current copies of all of our committees’ charters are available on our website at http://ir.avidbio.com/corporate-governance. The following is a summary of our three standing committees:

Compensation Committee. The primary purposes of the Compensation Committee are to: (i) establish the compensation policies of the Company; (ii) ensure that the compensation of the Board of Directors, Chief Executive Officer and other corporate officers of the Company enables it to attract and retain high-quality leadership and is consistent with such policy; (iii) review the performance of the Company’s Chief Executive Officer and other corporate officers in achieving Company goals and objectives and ensure that senior executives of the Company are compensated effectively in a manner consistent with the strategy of the Company; and (iv) produce an annual report on executive compensation for inclusion in the Company’s proxy statements, in accordance with applicable rules and regulations. The Compensation Committee carries out its responsibilities in accordance with the terms of its charter. The Compensation Committee met five times during the fiscal year ended April 30, 2024. The Compensation Committee has the authority to recommend director compensation to the Board and to determine executive compensation and may not delegate this authority. The Compensation Committee’s members are currently Dr. Catherine J. Mackey (chair of the committee), Mr. Gregory P. Sargen, and Ms. Jeanne A. Thoma, each of whom is an independent director.

Audit Committee. The primary purposes of the Audit Committee are to assist the Board of Directors in fulfilling its oversight responsibilities by reviewing: (i) the Company’s financial statements provided to stockholders, the public and others; (ii) the Company’s system of internal controls regarding finance, accounting, legal compliance and ethical behavior; and (iii) the Company’s auditing, accounting and financial reporting process. The Audit Committee carries out its responsibilities in accordance with the terms of its charter. The Audit Committee met four times during the fiscal year ended April 30, 2024. The Audit Committee has determined that Mr. Gregory P. Sargen is an “audit committee financial expert” within the meaning of Item 407 of Regulation S-K of the Securities Act and meets the financial sophistication required under the Nasdaq listing standards. The Audit Committee meets the Nasdaq composition requirements, including the requirement that all Audit Committee members have the ability to read and understand financial statements. The Audit Committee members are currently Mr. Gregory P. Sargen (chair of the committee), Dr. Catherine J. Mackey, Mr. Richard B. Hancock, and Dr. Esther M. Alegria, each of whom is an independent director.

Corporate Governance Committee. The primary purposes of the Corporate Governance Committee are to: (i) make recommendations to the Board of Directors regarding the size of the Board of Directors; (ii) make recommendations to the Board of Directors regarding the criteria for the selection of director nominees; (iii) identify and recommend to the Board of Directors for selection as director nominees individuals qualified to become members of the Board of Directors, including stockholder recommendations; (iv) recommend committee assignments to the Board of Directors; (v) regularly review our corporate governance documents, including our corporate Charter and Bylaws and the Corporate Governance Guidelines; (vi) oversee the evaluation of the Board of Directors and committees thereof, and (vii) review and monitor our environmental, social and governance strategy, policies and practices. The Corporate Governance Committee met three times during the fiscal year ended April 30, 2024. The Corporate Governance Committee’s members are currently Ms. Jeanne A. Thoma (chair of the committee), Dr. Joseph Carleone, Dr. Esther M. Alegria and Mr. Richard B. Hancock, each of whom is an independent director.

Stockholder Recommendations for Nominations to the Board of Directors

The Corporate Governance Committee intends to evaluate candidates recommended by stockholders in the same manner as those recommended by others.

Any recommendation submitted to the Company should be in writing and should include any supporting material the stockholder considers appropriate in support of that recommendation but must include information that would be required under the “advance notice” provisions of our Bylaws and rules of the SEC to be included in a proxy statement soliciting proxies for the election of such candidate. Stockholders wishing to propose a candidate for consideration may do so by submitting the above information to the attention of the Corporate Secretary of the Company c/o Avid Bioservices, Inc., 14191 Myford Road, Tustin, California 92780, and such director nominations will be presented to the Board for its consideration. Stockholders must also satisfy the notification, timeliness, consent, and information requirements set forth in our Bylaws. These requirements are also described under “Questions and Answers About the Annual Meeting—What is the deadline to propose actions for consideration at next year’s annual meeting of stockholders?”.

Board of Directors Leadership Structure

Our Board of Directors does not have a policy on whether the same person should serve as both the Chief Executive Officer and Chairman of the Board of Directors or, if the roles are separate, whether the Chairman should be selected from the non-employee directors or should be an employee. The Board of Directors believes that it should have the flexibility to make these determinations in the way that it believes best provides appropriate leadership for the Company at a given time.  Separation of the Company’s Chief Executive Officer and Chairman of the Board is appropriate for the Company at this time. Both positions are actively engaged on significant matters affecting the Company. The Chief Executive Officer has overall responsibility for all aspects of the Company’s operations, while the Chairman has a greater focus on governance of the Company, including oversight of the Board of Directors. We believe this balance of shared leadership between the two positions is a strength for the Company. In accordance with the Corporate Governance Guidelines, in the event that in the future the positions of Chairman of the Board and Chief Executive Officer are held by the same person, the non-employee directors shall designate a lead independent director.

Risk Oversight

The Board of Directors oversees an enterprise-wide approach to risk management that is designed to support the achievement of organizational objectives to improve long-term performance and enhance stockholder value. A fundamental part of risk management is not only understanding the risks a company faces and what steps management is taking to manage those risks, but also understanding what level of risk is appropriate for the Company. In setting the Company’s business strategy, the Board of Directors assesses the various risks being mitigated by management and determines what constitutes an appropriate level of risk for the Company.

While the Board of Directors has the ultimate oversight responsibility for the risk management process, various committees of the Board of Directors also have responsibility for risk management. In particular, the Audit Committee focuses on financial risk, including internal controls, and financial risk assessment reports from management. Our Compensation Committee is responsible for overseeing the management of risks relating to our executive and other compensation plans. The Corporate Governance Committee oversees the annual Board self-evaluation and director nomination processes in order to promote a diverse and well-balanced Board, and oversees the evaluation of the Chief Executive Officer, including succession planning. These committees meet regularly and report their findings to the Board of Directors throughout the year. The Company also maintains insurance policies that may reimburse the Company to an extent for a range of potential losses that the Company could incur in due course.

Code of Business Conduct and Ethics

We have adopted a Code of Business Conduct and Ethics (“Code of Ethics”) that applies to our directors and employees, including our principal executive officer, principal financial officer, principal accounting officer or controller, and have posted the text of the policy on our website (avidbio.com) in the Investors—Corporate Governance section. In addition, we intend to promptly disclose on our website, to the extent required by the rules and regulations of the SEC, (i) the nature of any amendment to the Code of Ethics that applies to our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, and (ii) the nature of any waiver, including an implicit waiver, from a provision of the Code of Ethics that is granted to one of these specified individuals, the name of such person who is granted the waiver and the date of the waiver.

Communicating with the Board of Directors

Under our Code of Ethics, we have established an Open Door Policy and Hotline For Reporting Employee Complaints or Accounting or Auditing Matters for the confidential, anonymous submission by our directors, officers and employees of concerns regarding violations or suspected violations of our Code of Ethics, including those relating to accounting and auditing matters. In addition, the Audit Committee has established procedures for the receipt, retention and treatment of communications received by us, our Board of Directors and the Audit Committee regarding accounting, internal controls or auditing matters. Written communications from our stockholders and employees may be sent to: Avid Bioservices, Inc., Attention: Audit Committee Chair, 14191 Myford Road, Tustin, California 92780.

In addition, the Company’s annual meeting of stockholders provides an opportunity each year for stockholders to ask questions of or otherwise communicate directly with members of the Board of Directors on appropriate matters. Any stockholder or interested person may communicate with the Company’s non-management directors as a group by sending a communication to the Board of Directors c/o Avid Bioservices, Inc., Attn: Corporate Secretary, Avid Bioservices, Inc., 14191 Myford Road, Tustin, California 92780. All communications will be reviewed by the Company’s Corporate Secretary. The Corporate Secretary will not forward to the non-management directors any spam, junk mail, mass mailing, product complaint, product inquiry, new product suggestion, job inquiry, survey, or business solicitation or advertisement. Material that is unduly hostile, threatening, illegal, or similarly unsuitable will also be excluded. The non-management directors who receive such communication will have discretion to determine the handling of such communication, and if appropriate, the response to the person sending the communication and disclosure, which shall be consistent with the Company’s policies and procedures and applicable law regarding the disclosure of information.

Corporate Responsibility and Environmental, Social and Governance (“ESG”)

In fiscal year 2024, we reinforced our dedication to corporate ESG, responsibility and sustainability by expanding our engagement with EcoVadis as a rated customer. EcoVadis is a globally recognized platform for business sustainability ratings. Avid recently earned a score of 56 from EcoVadis, placing the company in the 62nd percentile globally. The EcoVadis assessment evaluates 21 sustainability criteria across four core themes: Environment, Labor & Human Rights, Ethics and Sustainable Procurement. More than 125,000 companies globally have been rated by EcoVadis.

Additionally, we appointed a dedicated program owner for our corporate ESG and sustainability initiatives. Our ESG steering committee has been revitalized with new members from the People team, Operations, Supply Chain, Engineering, Environmental Health and Safety, and the executive team. Throughout the year, we developed and launched our corporate ESG website, which is now publicly accessible. The ESG working team made significant progress on various programs and initiatives including the following corporate policies:

In fiscal year 2024, Avid Bioservices made a commitment to align with the Science-Based Targets initiative (“SBTi”) methodology and standards. SBTi provides companies with a clearly-defined path to reduce emissions in line with the Paris Agreement goals. We have begun and plan to continue with the SBTi target setting process and disclosure.

Director Attendance at Annual Meetings of Stockholders

We have no policy requiring directors to attend annual meetings of stockholders, but directors are encouraged to attend our annual meetings at which they stand for re-election. Six of our then current directors attended the 2023 Annual Meeting of Stockholders and one director was unable to attend due to an unavoidable scheduling conflict.

Director Compensation

Our non-employee director compensation program is designed to attract, retain and reward qualified non-employee directors and align the financial interests of the non-employee directors with those of our stockholders. The following table sets forth information regarding the compensation earned during the fiscal year ended April 30, 2024 by each individual who served as a non-employee director at any time during the fiscal year. Mr. Green’s compensation for his services as an employee is discussed under “Compensation Discussion and Analysis” and the executive compensation tables that follow it.

Our Compensation Committee reviews and recommends to our Board for approval our non-employee director compensation program which consists of both cash and equity compensation. For fiscal year 2024, the non-employee director compensation program, which was unchanged from the prior two fiscal years, was comprised of: (A) cash compensation consisting of: (i) an annual retainer of $55,000, (ii) an annual retainer of $50,000 for the Chairman of the Board, and (iii) an annual retainer of $20,000 and $15,000 per committee chairmanship and membership, respectively, each payable in advance in equal quarterly installments, and (B) equity compensation consisting of an annual RSU award, in December of each year, under our 2018 Omnibus Incentive Plan for a number of shares of the Company’s Common Stock with a grant date intrinsic value of $140,000. These RSUs fully vest on the first anniversary of the date of grant. With respect to a non-employee director’s initial appointment or election to our Board of Directors, such non-employee director would receive an initial RSU award with a grant date intrinsic value of $210,000. The initial RSU award vests in equal annual installments over a three-year period following the grant date. With respect to the annual and initial RSU awards, the number of shares awarded to each non-employee director is based on the average closing price of the Company’s Common Stock as reported on the Nasdaq Stock Market for the thirty (30) days ended on the date of the award. The foregoing compensation program was initially approved for fiscal year 2022 based on a benchmarking analysis conducted by Aon Consulting, Inc., through its Human Capital Solutions division (“Aon”), the Compensation Committee’s then independent compensation consultant.

Our non-employee directors are subject to our stock ownership policy and our policy on securities trading, described in further detail under the “Compensation Discussion and Analysis” in the Proxy Statement.

In July 2023, the Board adopted the Avid Bioservices, Inc. Deferred Compensation Plan, effective July 7, 2023. The plan provides non-employee directors and certain highly compensated employees with an opportunity to defer up to 80% of their base compensation, 100% of their cash bonuses (if applicable), and up to 100% of certain RSU and performance stock unit (“PSU”) awards. No non-employee director deferred any compensation in fiscal year 2024.

The Audit Committee, in consultation with management, has approved the appointment of Ernst & Young LLP as our independent registered public accounting firm for fiscal year ending April 30, 2025. Ernst & Young LLP has served in this capacity for each of the 24 fiscal years ended April 30, 2024. During the 24 fiscal years ended April 30, 2024, there were no disagreements between the Company and Ernst & Young LLP on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure.

Representatives of Ernst & Young LLP are expected to attend the Annual Meeting with the opportunity to make a statement if they desire to do so and are expected to be available to respond to appropriate questions.

Stockholder ratification of the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm is not required by our Bylaws or otherwise. However, the Board of Directors is submitting the appointment of Ernst & Young LLP to the stockholders for ratification as a matter of good corporate governance. If the stockholders fail to ratify the selection, the Audit Committee will reconsider whether or not to retain Ernst & Young LLP. Even if the selection is ratified, the Audit Committee in its discretion may direct the appointment of a different independent registered public accounting firm at any time during the year if the Audit Committee determines that such a change would be in the best interests of the Company and its stockholders.

Recommendation of the Board of Directors

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT Stockholders VOTE “FOR” PROPOSAL No. 2 TO RATIFY THE APPOINTMENT OF Ernst & Young LLP AS THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR the FISCAL YEAR ENDING APRIL 30, 2025.

Independent Registered Public Accounting Firm Fees

The following summarizes aggregate fees billed to the Company for the fiscal years ended April 30, 2024 and 2023 by Ernst & Young LLP, our independent registered public accounting firm:

Pre-Approval Policy for Services Provided by our Independent Registered Public Accounting Firm

The Audit Committee has established a policy to pre-approve all audit and permissible non-audit services provided by our independent registered public accounting firm consistent with applicable SEC rules. From and after the effective date of the SEC rule requiring Audit Committee pre-approval of all audit and permissible non-audit services provided by an independent registered public accounting firm, the Audit Committee has pre-approved all audit and permissible non-audit services provided by Ernst & Young LLP.

The Audit Committee has considered whether the non-audit services provided by Ernst & Young LLP are compatible with maintaining that firm’s independence and has determined that the provision of such non-audit services is compatible with maintaining the independent registered public accounting firm’s independence.

Report of the Audit Committee of the Board of Directors

The Audit Committee reviews the Company’s financial matters and oversees the financial reporting process on behalf of our Board of Directors. The Audit Committee operates pursuant to a written Audit Committee Charter adopted by the Board. In accordance with the Audit Committee Charter, we must meet the independence requirements and other criteria set by the Nasdaq Listing Rules and SEC rules and regulations as currently in effect. As part of our oversight of our Company’s financial statements, the Audit Committee reviews and discusses with both management and Ernst & Young LLP all annual and quarterly financial statements prior to their issuance. Our responsibilities include selecting, in consultation with management, an accounting firm to be hired as the Company’s independent registered public accounting firm. We are also responsible for recommending to the Board of Directors that the Company’s financial statements be included in its Annual Reports on Form 10-K, and based on our review and discussion described below, we recommended to the Board that the Company’s financial statements be included in the Company’s Annual Report on Form 10-K for the fiscal year ended April 30, 2024 (the “Annual Report”). We took the following steps in making our recommendation that the Company’s financial statements be included in the Annual Report:

Based on the reviews and discussions explained above, the Audit Committee recommended to the Board of Directors that the Company’s financial statements be included in the Annual Report.

This report of the Audit Committee shall not be deemed incorporated by reference by any general statement incorporating by reference this Proxy Statement into any filing under the Securities Act or the Exchange Act, except to the extent we specifically incorporate this information by reference and shall not otherwise be deemed filed under either the Securities Act or the Exchange Act.

The Audit Committee of the Board of Directors

Gregory P. Sargen (Chair of the Audit Committee)

Catherine J. Mackey, Ph.D.

Esther M. Alegria, Ph.D.

Richard B. Hancock

In accordance with the requirements of Section 14(a) of the Exchange Act and the related rules of the SEC, stockholders have an opportunity to cast an advisory, non-binding vote on the compensation paid to our Named Executive Officers (“NEOs”), as disclosed in this Proxy Statement pursuant to Item 402 of Regulation S-K.  This proposal, commonly known as a “Say-on-Pay” proposal, is currently conducted at each annual stockholders’ meeting and gives stockholders the opportunity to either approve, reject or abstain from voting with respect to such compensation. In considering their vote, we urge stockholders to review the information on our compensation policies and decisions regarding our NEOs presented in the “Compensation Discussion and Analysis” section of this Proxy Statement.

As discussed in the “Compensation Discussion and Analysis” section of this Proxy Statement, the primary objectives of our executive compensation program for fiscal year 2024 were to (i) attract and retain qualified executives with the requisite skills and abilities to enable us to achieve our corporate goals and (ii) align the interests of executives with those of stockholders by rewarding executives for the Company’s achievement of its goals and increased stockholder value. While we believe that the Compensation Committee is in the best position to determine whether the Company’s executive compensation program is appropriately tailored to meet these objectives, we appreciate and value our stockholders’ views.  Your advisory, non-binding vote will serve as an additional tool for the Compensation Committee in assessing the Company’s executive compensation program.

The Board recommends a vote in favor of the following resolution:

“RESOLVED, that the compensation paid to the Company’s Named Executive Officers, as disclosed pursuant to Item 402 of Regulation S-K in the Company’s 2024 Proxy Statement, including the Compensation Discussion and Analysis, compensation tables and narrative discussion, is hereby APPROVED.”

The Say-on-Pay vote is advisory, and therefore is not binding on us, our Compensation Committee or our Board. The Say-on-Pay vote will, however, provide information to us regarding investor sentiment about our executive compensation philosophy, policies and practices, which the Compensation Committee will consider when determining executive compensation for the remainder of the current fiscal year and beyond. Our Compensation Committee values the opinions of our stockholders. To the extent there is any significant vote against the NEOs’ compensation as disclosed in this Proxy Statement, we will endeavor to engage with stockholders to better understand the concerns that influenced the vote and consider our stockholders’ concerns. The Compensation Committee will evaluate whether any actions are necessary to address those concerns. We expect to conduct our next Say-on-Pay vote at our 2025 annual meeting of stockholders.

Recommendation of the Board of Directors

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE “FOR” PROPOSAL NO. 3 TO APPROVE, BY AN ADVISORY VOTE, THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS AS DISCLOSED IN THIS PROXY STATEMENT.

Security Ownership Of Certain Beneficial Owners, Directors And Management

Share Ownership

The following table sets forth certain information regarding the beneficial ownership of our Common Stock as of August 15, 2024, by: (i) each stockholder known to us to beneficially own more than 5% of our Common Stock; (iii) each current director and director nominee; (iv) our Named Executive Officers as of April 30, 2024; and (v) all current directors and executive officers of the Company as a group.

Beneficial ownership is determined in accordance with the rules of the SEC and includes voting or investment power with respect to shares of our Common Stock. Under these rules, Common Stock subject to any option or other right that are exercisable or convertible within 60 days after August 15, 2024 are deemed beneficially owned and outstanding for computing the percentage ownership of the individual or entity holding such securities, but are not considered outstanding for computing the percentage ownership of any other person. Unless otherwise indicated, each person named below holds sole investment and voting power, other than the powers that may be shared with the person’s spouse under applicable law.

COMPENSATION DISCUSSION AND ANALYSIS

The following is a discussion and analysis of our executive compensation program and compensation decisions made for the fiscal year ended April 30, 2024 (“fiscal year 2024”).  This discussion relates to the executive officers named in the Summary Compensation Table included within the Compensation Discussion and Analysis section of this Proxy Statement.  We refer to these officers as the “Named Executive Officers” or “NEOs.”

The following summarizes select highlights from our fiscal year ended April 30, 2024:

Executive Summary

The Compensation Committee of the Board is responsible for establishing, implementing and overseeing our overall compensation strategy and policies, including our executive compensation program, in a manner that supports our business objectives. The Compensation Committee believes that attracting, motivating, retaining, and rewarding superior executive talent is key to delivering attractive stockholder returns, and that an appropriately structured executive compensation program is critical to that end. For fiscal year 2024, the Compensation Committee continued to maintain an executive compensation philosophy designed to tie executive compensation to the successful execution of our overall corporate goals and adherence to our core values that best serve the interests of our stockholders. The Compensation Committee’s complete roles and responsibilities are set forth in a written charter of the Compensation Committee adopted by our Board of Directors, which can be found at our website, http://ir.avidbio.com/corporate-governance.

Our Named Executive Officers for fiscal year 2024 were the following individuals:

Compensation Philosophy

The Company’s compensation philosophy is to provide compensation that will attract, motivate, retain and reward high-performing talent in our industry and foster a pay-for-performance philosophy by tying a significant portion of pay to financial performance as well as other goals that support the creation of sustainable long-term stockholder value. The Company believes that the compensation of its executive officers should align the executive officers’ interests with those of the stockholders and focus executive officer behavior to achieve both near-term corporate goals and long-term business objectives and strategies.

Compensation Objectives

The Company’s compensation programs for its executive officers are designed to provide the following:

The Compensation Committee believes that combining short-term compensation components (such as base salaries and annual cash incentive bonuses) and long-term compensation components (such as time-based and performance-based equity incentive awards) provides an overall compensation structure that is consistent with the compensation philosophy of both attracting and retaining key executives and providing incentive for the achievement of short and long-term corporate goals, as well as aligning executives’ interests with those of our stockholders.

Compensation Process

Role of the Compensation Committee in Setting Executive Compensation

It is the responsibility of the Compensation Committee to administer the Company’s compensation programs to ensure that they are competitive with specific peers within the contract development and manufacturing organizations industry segment, as well as companies within the broader life sciences industry having a comparable profile, and to include incentives that are designed to appropriately drive the Company’s continued efforts to create stockholder value. The Compensation Committee annually evaluates the performance of our executive officers relative to our corporate goals and objectives and reviews and approves all components of executive officer compensation, including base salaries, annual cash incentive compensation, and equity incentive compensation. Details of the Compensation Committee’s authority and responsibilities are specified in its charter. 

In determining each executive officer’s compensation, our Compensation Committee reviews our corporate financial performance and financial condition and assesses the performance of the individual executive officers. The Chief Executive Officer evaluates the performance of the other executive officers and develops individual recommendations based upon peer group benchmarking data prepared by the Compensation Committee’s independent compensation consultant. The Chief Executive Officer and the Compensation Committee may make adjustments to the recommended compensation based upon an assessment of an individual’s performance and contributions to Avid. The compensation for the Chief Executive Officer is assessed and established by the Compensation Committee. This assessment is based on the peer group benchmarking data and other factors described in this Compensation Discussion and Analysis, and adjustments may be made based upon the non-employee directors’ evaluation, conducted under the supervision of the Corporate Governance Committee, of the Chief Executive Officer’s performance and contributions.

Although the Compensation Committee generally makes several compensation decisions in the first quarter of the fiscal year, the compensation evaluation process is ongoing. Compensation discussions and decisions are designed to promote our fundamental business objectives and strategy. Evaluation of management performance and rewards is performed annually or more often as needed.

Independent Compensation Consultant

In establishing compensation levels for each executive officer, the Compensation Committee has the authority to engage the services of outside consultants. For fiscal year 2024, the Compensation Committee did not engage an independent compensation consultant, but instead relied on a third party engaged by management to update the executive compensation data for our peer group as described below under “Market Benchmarks and Competitive Analysis.”

Factors for Determining Compensation

Market Benchmarks and Competitive Analysis

For fiscal year 2024, the Compensation Committee, with the assistance of management, reviewed updated market capitalization and revenue data for the Company’s fiscal year 2023 peer group and determined that such peer group continued to serve as a representative set of peer companies for purposes of benchmarking executive compensation. The fiscal year 2023 peer group had been approved by the Compensation Committee based on an analysis prepared by, and the recommendation of, Aon, who had been engaged as the Compensation Committee’s independent consultant for such fiscal year. The following 14 companies comprise the Company’s peer group for benchmarking executive compensation for fiscal year 2024:

The Compensation Committee uses peer group compensation data as one of several factors in determining appropriate compensation parameters for base salary, variable cash compensation and equity-based, long-term incentives. The Compensation Committee’s executive compensation decisions are made on a case-by-case basis, and specific benchmark results do not, in and of themselves, determine individual target compensation decisions. Management asked its compensation consultant, Anderson Pay Advisors, LLC, to update the peer group base salary, target bonus, target total cash, long-term incentive value and target total compensation data for the peer group executives. Management provided this data compiled by Anderson Pay Advisors to the Compensation Committee in connection with its fiscal year 2024 executive compensation decisions. Anderson Pay Advisors had been engaged by management to assist management in establishing a competitive compensation structure for all non-executive employees. Anderson Pay Advisors was not engaged by management to provide advice or recommendations on the amount or form of executive and director compensation. Anderson Pay Advisors merely used publicly available information to update the peer group executive compensation data and did not provide any advice to the Compensation Committee.

The Compensation Committee generally targets each NEO’s total compensation to the 50^th percentile of the peer group, although individual elements of compensation may be above or below the 50^th percentile. Additionally, the Compensation Committee considers a number of additional factors to determine the appropriate level of each NEO’s total compensation and each component of compensation, including the Company’s financial and operational performance and the relevant executive’s performance, experience, responsibilities and impact. Due to these other factors, the Compensation Committee may set an NEO’s total compensation below, at or above the 50^th percentile of the peer group.

Performance

One of the primary objectives of our compensation program is to motivate our Named Executive Officers to achieve our short and long-term strategic goals. These corporate goals for fiscal year 2024 were tied to increasing revenue, backlog, adjusted net income and earnings before interest, taxes, depreciation and amortization. In addition to linking compensation to the attainment of pre-approved corporate goals, individual performance is assessed against individual goals such as continuing to diversify our client base, increasing production capacity through facilities expansion, continuing the diversification of our service offering into the cell and gene therapy market, managing operational and expansion costs and improving operational efficiencies, and more subjective, non-formulaic, criteria, such as:

“Say-on-Pay” Consideration

We provide our stockholders with the opportunity to cast an advisory vote on executive compensation (a “say-on-pay advisory proposal”) every year. We value our stockholders’ opinions and feedback and are committed to understanding the priorities and concerns of our stockholders. We believe that ongoing engagement builds mutual trust and alignment with our stockholders and is essential to our long-term success. At our 2023 Annual Meeting, approximately 91% of the shares that voted at the meeting approved, on an advisory basis, the compensation of our Named Executive Officers for fiscal 2023. The Compensation Committee views this outcome as an indication of our stockholders’ positive views of our compensation program, and will continue to review our executive compensation programs in an effort to ensure they appropriately address our key objectives for the fiscal year ending April 30, 2025.

Components of Our Fiscal Year 2024 Executive Compensation Program

Our Compensation Committee structured our executive compensation program to ensure that executive officers are compensated in a manner consistent with stockholder interests, competitive pay practices and applicable regulatory requirements.

Our Compensation Committee did not have any formal or informal policy or target for allocating compensation between long-term and short-term compensation, between cash and non-cash compensation or between fixed and performance-based compensation. Instead, the Compensation Committee, after reviewing the Aon analysis, determined what it believes to be an appropriate level and mix of the various compensation components to achieve the compensation and corporate objectives described in this discussion.

Base Salary

Base salary represents the fixed portion of an executive officer’s compensation and is intended to provide compensation for day-to-day performance. The Compensation Committee believes that a competitive base salary is a necessary element of any compensation program that is designed to attract and retain talented and experienced executives. Each executive officer’s base salary is initially determined upon hire or promotion based on the executive officer’s responsibilities, prior experience, individual compensation history and salary levels of other executives within the Company and similarly situated executives within our peer group. Base salary is typically reviewed annually. The Compensation Committee believes that the base salaries paid to our executive officers during the fiscal year 2024 achieved the Company’s compensation objectives. The following were the base salaries of our NEOs for fiscal year 2024:

Annual Cash Bonus Plan

Consistent with prior fiscal years, for fiscal year 2024 the Compensation Committee established an annual cash bonus plan (the “Annual Cash Bonus Plan”) for all eligible employees, including our NEOs. Under the Annual Cash Bonus Plan, participating employees are eligible to earn an incentive cash bonus based on their target bonus percentage, which is a percentage of their annual base salary, our attainment of certain corporate goals approved by the Compensation Committee at the beginning of the fiscal year and each employee’s individual performance and contributions towards the achievement of the corporate goals. Our CEO’s annual cash bonus is 100% based on our achievement against the corporate goals and the other NEOs’ annual cash bonus is 70% based on our achievement against the corporate goals and 30% based on each NEO’s individual performance and contributions to the achievement of the corporate goals.

Target bonus percentages are benchmarked against our peer group and generally correlate to the level of responsibility of the NEO, with higher target bonus percentages generally reserved for executives having more responsibility. The target bonus percentages as approved by our Compensation Committee for fiscal year 2024 are set forth in the following table:

For fiscal year 2024, the Compensation Committee established three corporate goals and corresponding financial performance targets for each goal. The three corporate goals were Adjusted EBITDA, Revenue and Backlog. “Adjusted EBITDA” is a non-GAAP measure that is defined by the Company as net income plus interest, taxes, depreciation and amortization, determined by reference to our audited financial results, and further adjusted by stock-based compensation and other adjustments deemed appropriate and approved by the Board of Directors. “Revenue” is measured against our audited financial results for fiscal year 2024. “Backlog” represents our signed customer orders as of April 30, 2024. The Compensation Committee believes use of these metrics is appropriate as they are important indicators of future growth and increased profitability, and are commonly used by investors and analysts when reviewing our performance.

For fiscal year 2024 Adjusted EBITDA determined funding of the Annual Cash Bonus Plan bonus pool with a minimum or threshold of 75% of target and a maximum of 130% of target. The Adjusted EBITDA target for fiscal year 2024 approved by the Compensation Committee was $24.5 million, which includes the accrual of fiscal year 2024 bonuses assuming achievement at 100% of target for the Revenue and Backlog goals. If the Company achieved or exceeded the threshold target for Adjusted EBITDA, which was $18.4 million, the bonus pool is then further adjusted by the Company’s performance against the goals for Revenue and Backlog, which are each given a 50% weight, with a minimum or threshold of 85% of target and a maximum of 115% of target. For actual performance levels between the “Threshold” and “Target”, the potential award percentage for each metric is interpolated on a straight-line basis, and for performance levels between “Target” and “Maximum”, the potential award percentage for each metric is interpolated applying a 2x multiplier. For example, achieving 105% of a performance metric would result in a 110% payout for such performance metric.

The determination of the bonus amounts under the Annual Cash Bonus Plan for fiscal year 2024 is illustrated as follows:

Corporate Performance Results

For fiscal year 2024, our performance against the Adjusted EBITDA bonus funding target and the two-performance metrics was as follows ($ in millions):

Fiscal Year 2024 Annual Cash Bonus Plan Payouts

As illustrated by the above table, for fiscal year 2024 because our performance against the Adjusted EBITDA bonus funding target did not achieve the threshold of 75% of target, or $18.4 million, the Annual Cash Bonus Plan was not funded resulting in no cash bonus payout for fiscal year 2024.

Long-term Equity Incentive Awards

Another component of our executive compensation program is long-term equity incentive awards. Our Compensation Committee believes that equity awards are an effective means of aligning the interests of executive officers and stockholders, rewarding executive officers for the Company’s success over the long term, and providing executive officers an incentive to remain with us. In fiscal year 2022, in an effort to improve the linkage between pay and performance and better align executive long-term incentives with the interests of stockholders, the Compensation Committee introduced PSU awards as a component of the mix of equity awards to our executive officers and has continued this practice each fiscal year thereafter. For fiscal year 2024 awards to executive officers, 50% of the total target long-term incentive value (“Target LTI Value”) was delivered as PSU awards and 50% of the Target LTI Value was delivered as RSU awards. The following is a summary of each type of long-term equity incentive award:

PSUs:

RSUs:

Fiscal 2024 Annual LTI Awards

The Compensation Committee approved the following equity awards to the NEOs, which awards were made on July 9, 2023, in accordance with our long-term equity incentive plan design, as detailed below:

Vesting of Outstanding PSU Awards Based on Fiscal Year 2024 Performance Period

The following tables reflect the vesting calculation for each NEOs outstanding PSU awards based on the fiscal year 2024 performance period.

The equity award information for the fiscal year ended April 30, 2024 is set forth below under “Grants of Plan-Based Awards for Fiscal Year Ended April 30, 2024”. See footnote 2 to the “Option Exercises and Stock Vested” table below for the number of earned PSUs for each NEO.

Executive Severance Plan, Employment Agreements and Change in Control Benefits

Effective December 5, 2022, based on the recommendation of the Compensation Committee following its review of current market practices in consultation with Aon, its independent compensation consultant, our Board approved and adopted an Executive Severance Plan (“Plan”) applicable to all individuals employed by us at the C-level and vice president level, including NEOs. The Plan provides for severance benefits and payments upon certain involuntary terminations, including in connection with a change-in-control. Our Compensation Committee believes that severance and change in control protections are necessary to attract and retain executive talent and are a customary component of executive compensation. We are also a party to certain legacy employment agreements with Messrs. Green, Hart and Ziebell and an offer letter with Mr. Kwietniak, each of which provides for severance payments and accelerated vesting benefits triggered by various termination events. To the extent an Executive Participant, including Messrs. Green, Hart, Kwietniak and Ziebell, is currently a party to an existing agreement with us providing for severance benefits, such Executive Participant has the ability, following the occurrence of an event entitling such Executive Participant to receive severance benefits, to elect whether to receive, in total, the benefits under the existing agreement or the Plan. For a description of the Plan and employment agreements/offer letter and our potential payment obligations under the Plan or employment agreements/offer letter as of the fiscal year ended April 30, 2024, please see “Overview of Employment Agreements and Potential Payments Upon Termination or Change-in-Control” and the related tabular disclosure below.

With regard to the Plan and employment agreements/offer letter, we believe that severance protection triggered by a change-in-control allows our executives to assess a potential change-in-control objectively, from the perspective of what is best for our stockholders, without regard to the potential impact of the transaction on their own job security. We use a “double trigger” with respect to benefits that are to be provided in connection with a change-in-control. A change-in-control does not itself trigger benefits; rather, benefits are paid only if the employment of the executive is terminated by us, other than for “cause,” or by the executive of “good reason,” each as defined in the employment agreements, in connection with a change in control. We believe a “double trigger” benefit maximizes stockholder value because it prevents a windfall to executives in the event of a change-in-control in which the executive retains significant responsibility as defined in his or her individual agreement, while still providing our executives appropriate incentives to cooperate in negotiating any change-in-control that may put their jobs at risk. Further, we believe the severance protection offered under the Plan and employment agreements is balanced with the interests of the Company and its stockholders, as the executives are bound by non-disclosure, non-competition, and non-solicitation arrangements and must execute a general release in favor of the Company as a condition to receiving benefits under these agreements. None of the agreements include any tax gross-up payments for “golden parachute” excise taxes. All of the NEOs are “at will” employees.

Non-Qualified Deferred Compensation Plan

In July 2023, the Board adopted the Avid Bioservices, Inc. Deferred Compensation Plan, effective as of July 7, 2023. The plan provides non-employee directors and certain highly compensated employees with an opportunity to defer up to 80% of their base compensation, up to 100% of their cash bonuses (if applicable), and up to 100% of certain restricted stock unit and performance stock unit awards. The plan also allows for discretionary employer contributions, which, if made, will be subject to vesting and other conditions established by the Compensation Committee.

Perquisites and Other Benefits

Our NEOs are eligible to participate in broad-based benefit plans in which our regular employees are eligible to participate, including health, dental, and vision insurance, life and disability insurance, a 401(k) plan, and an Employee Stock Purchase Plan.

Under the 401(k) plan, NEOs are allowed to contribute on the same basis as other employees of the Company as determined by IRS regulations. For fiscal year 2024, the Company matched 50% of all employee contributions, including NEOs, up to the first 6% of a participant’s annual salary and bonus for all 401(k) plan contributions, subject in each case to certain IRS limitations. Under the 401(k) plan, each participating employee, including NEOs, is fully vested in his or her contributions to the 401(k) plan and Company contributions to the 401(k) plan will fully vest after three years of service.

Under the ESPP, NEOs are allowed to participate on the same basis as other employees of the Company, which allows employees on a voluntarily basis to purchase shares of our Common Stock directly from the Company through accumulated payroll deductions at a purchase price equal to the lesser of 85% of the fair market value of our Common Stock (i) on the first trading day of the six-month offering period or (ii) the last trading day of the six-month offering period. The Company believes the ESPP closely aligns the interests of participants with the interests of stockholders.

In addition, NEOs are eligible to participate in the same employee benefit plans as all other employees. The cost of health and dental insurance was 100% covered by the Company for NEOs and eligible dependents during fiscal year 2024. In addition, all employees, including NEOs, receive one (1) times their annual salary in term-life insurance, long-term disability benefits, and vision insurance at no cost to the employee. We also provide all employees, including NEOs, the option to make pre-tax payroll deductions up to $3,200 per calendar year under a flexible spending account plan that can be utilized for out-of-pocket medical, dental and other allowable expenses. The Company also provides paid-time-off benefits to cover vacation and sick time and annually determined Company holidays.

Tax and Accounting Considerations

We have not provided or agreed to provide any of the Company’s NEOs or directors with a gross-up or other reimbursement for tax amounts they might pay pursuant to Section 4999 or Section 409A of the Internal Revenue Code (as amended, the “Code”). Sections 280G and 4999 of the Code provide that executive officers, directors who hold significant stockholder interests and certain other service providers could be subject to significant additional taxes if they receive payments or benefits in connection with a change-in-control of the Company that exceed certain limits, and that we or our successor could lose a deduction on the amounts subject to the additional tax. Section 409A of the Code also imposes additional significant taxes on the individual in the event that an employee, director or service provider receives “deferred compensation” that is not exempt from or does not meet the requirements of Section 409A.

For the Company’s financial statements, cash compensation, such as salary and bonus, is expensed and for income tax returns, cash compensation is generally deductible except as set forth below. For equity-based compensation, we expense the fair value of such grants over the requisite service period.

Under Section 162(m) of the Code (“Section 162(m)”), compensation paid to each of our “covered employees” that exceeds $1 million per taxable year is generally non-deductible. Although our Compensation Committee will continue to consider tax implications as one factor in determining executive compensation, our Compensation Committee also looks at other factors in making its decisions and retains the flexibility to provide compensation for our executive officers, including our named executive officers, in a manner consistent with the goals of our executive compensation program and the best interests of the Company and its stockholders, which may include providing for compensation that is not deductible by us due to the deduction limit under Section 162(m). Under ASC Topic 718, we are required to estimate and record an expense for each award of equity compensation over the vesting period of the award. We record share-based compensation expense on an ongoing basis according to ASC Topic 718.

Compensation Risk

As part of its oversight of our compensation policies, the Compensation Committee considers the incentives created by our executive compensation program and the impact that our compensation policies could have on our overall risk profile. In addition, the Compensation Committee annually reviews our compensation policies and procedures for all employees, including the NEOs, to determine whether they create risks that are reasonably likely to have a material adverse effect on the Company. Based on its latest review, our Compensation Committee concluded that our compensation policies and procedures did not create such risks.

Compensation Clawback Policy

Effective December 1, 2023, our Board of Directors adopted our Incentive-Based Compensation Recovery Policy (the “Clawback Policy”) pursuant to Listing Rule 5608 of the corporate governance rules of Nasdaq implementing Rule 10D-1 under the Exchange Act. The Clawback Policy is administered by our Compensation Committee and applies to all incentive-based compensation received by current and former executive officers of the Company as defined in Rule 10D-1 (each an “Affected Officer”) after October 2, 2023. Under the Clawback Policy, if the Company is required to prepare an accounting restatement to correct the Company’s material noncompliance with any financial reporting requirement under securities laws, including restatements that correct an error in previously issued financial statements that is material to the previously issued financial statements or that would result in a material misstatement if the error were corrected in the current period or left uncorrected in the current period (collectively, a “Restatement”), the Company is obligated (subject to limited exceptions) to recover erroneously awarded incentive-based compensation received from the Company by Affected Officers. Incentive-based compensation includes any compensation that is granted, earned or vested based in whole or in part on the attainment of a financial reporting measure.  Erroneously awarded incentive-based compensation is the amount of incentive-based compensation received that exceeds the amount of incentive-based compensation that otherwise would have been received had it been determined based on an applicable Restatement.

On April 24, 2024, we filed (i) a Form 10-K/A for the fiscal year ended April 30, 2023 to amend and restate our consolidated financial statements and related footnote information as of April 30, 2023 and for the fiscal year ended April 20, 2023, which also included the effects on the unaudited condensed consolidated financial statements included in our Quarterly Reports on Form 10-Q for the fiscal periods ended October 31, 2022 and January 31, 2023, (ii) a Form 10-Q/A for the fiscal quarter ended July 31, 2023 to amend and restate our unaudited condensed consolidated financial statements as of July 31, 2023 and for the three month period then ended, and (ii) a Form 10-Q/A for the fiscal quarter ended October 31, 2023 to amend and restate our unaudited condensed consolidated financial statements as of October 31, 2023 and for the three and six month periods then ended. No current or former executive officer had received any incentive-based compensation after October 2, 2023 and prior to the date the Audit Committee determined that the foregoing accounting restatements were necessary (March 11, 2024), and consequently there was no incentive-based compensation subject to recovery as a result of the restatements under the Clawback Policy.

Stock Ownership Guidelines

In June 2022, the Board adopted a share ownership policy relating to ownership of the Company’s securities by the Company’s NEOs and the non-employee directors. Subject to the terms of the policy, (i) the CEO is required to acquire over a five-year period and hold shares of Common Stock of the Company equal to three times his or her base salary as of a specified measuring date, (ii) each of the Company’s other NEOs is required to acquire over a five-year period and hold shares of Common Stock of the Company equal to one and one-half times his or her base salary as of a specified measuring date, and (iii) each of the Company’s non-employee directors is required to acquire over a five-year period and hold shares of Common Stock of the Company equal to three times the Company’s annual cash retainer paid to each such non-employee director. Unvested RSUs, PSUs and unexercised stock options (regardless of whether they are vested or unvested or in-the-money) are not included in the total number of shares owned by the NEOs or directors for purposes of the share ownership policy. Each NEO and non-employee director is required to hold at least 50% of all net shares (after shares withheld or sold to pay tax obligations) of RSUs and PSUs that vest until such individual gains compliance with the stock ownership guidelines. The Corporate Governance Committee annually reviews progress NEOs and non-employee directors are making toward achieving compliance with these guidelines and has determined that all of our NEOs and non-employee directors, as of July 1, 2024, are proportionally on track to achieve their specific ownership levels within the time required by the guidelines.

Securities Trading Policy (Insider Trading and Hedging)

The Company has adopted a securities trading policy governing the purchase, sale, and/or other dispositions of the Company’s securities by directors, officers and employees, that are reasonably designed to promote compliance with insider trading laws, rules and regulations. The Company also has procedures designed to further the foregoing purposes. The Company has not adopted a similar policy or procedures applicable to the Company because, to date, the Company has not purchased its securities in the open market or adopted a program to do so.

The Company’s securities trading policy also prohibits our directors, officers and employees from engaging in short sales, trading in options, puts, calls or other derivatives with respect to our securities, and purchasing the Company’s stock on margin. This policy also prohibits our directors and officers from engaging in hedging transactions and pledging Company securities as collateral for a loan.

Timing of Equity Awards

Equity-based awards to executive officers and other eligible key employees are made on a regular award date each year shortly after filing our Annual Report on Form 10-K for our most recently completed fiscal year. For the past several years, the award date has been July 9.

We also make equity-based awards other than on the regular annual award date in connection with hiring a new employee. We generally make these awards on the fifteenth day of the calendar month following the month in which the new employee commenced employment.

Formal approval for awards is obtained prior to the grant dates. We do not coordinate the timing of our awards with the release of material non-public information. With respect to the annual and new hire equity awards, the number of shares awarded to each individual is based on the average closing price of our Common Stock as reported on the Nasdaq Stock Market for the thirty (30) days ended on the date of the award.

We have not granted stock options for the past couple of fiscal years.

EXECUTIVE COMPENSATION

Executive Officers

The following table sets forth information regarding our current executive officers as of August 15, 2024:

The following biographies describe the business experience of our executive officers.

Nicholas S. Green’s biography is set forth above under the “Nominee Biographies” section of this Proxy Statement.

Daniel R. Hart has served as Chief Financial Officer since August 2018 and has over 25 years of financial accounting and operational experience. Prior to joining Avid, Mr. Hart served as Chief Financial Officer of ENO Holdings, Inc. from March 2014 to July 2018. Prior to that, Mr. Hart served SM&A, Inc. for almost a decade in several roles, including most recently as Senior Vice President, Chief Financial Officer. Earlier in his career, Mr. Hart worked in the audit practice of Deloitte & Touche LLP. Mr. Hart holds a Bachelor of Science in business administration with an emphasis in accounting from California Polytechnic State University, San Luis Obispo and is a certified public accountant (inactive).

Richard A. Richieri has served as Chief Operations Officer since October 2019 and has over 30 years of biopharmaceutical industry experience spanning the areas of drug discovery, CGMP operations, contract manufacturing and process development. Mr. Richieri previously spent 15 years with Avid Bioservices (when it was known as Peregrine Pharmaceuticals), including serving in the role of senior vice president of manufacturing. During that time, he was instrumental in launching, building and growing Avid’s CDMO business and helping the company diversify its production capabilities. Prior to joining the Company he spent the previous five years serving as an advisor and acting head of biologics production for Syngene International, a global discovery, development and manufacturing organization serving the pharmaceutical industry. Mr. Richieri holds a Bachelor of Science in chemical engineering from the University of California, Los Angeles and a Masters Degree in chemical engineering from the University of California, San Diego.

Matthew R. Kwietniak has served as Chief Commercial Officer since October 2021 and has over 30 years of sales experience spanning CDMO offerings, clinical development services and scientific products. Most recently he served as head of drug product sales for the Americas within the Pharma Services Group at Thermo Fisher Scientific from March 2018 to October 2021. In this role, Mr. Kwietniak is credited with record sales growth and consistent overachievement of quarterly and annual goals during his tenure and leadership. He also spent over a decade as a senior sales executive in the Clinical Development Services business at Covance, Inc., a division of LabCorp (“Covance”). Throughout his time with Covance, Mr. Kwietniak held multiple escalating sales leadership roles, culminating in a three-year tenure as Executive Director of sales in the Clinical Development Services division during which time he expanded and managed a U.S. commercial team of Business Development Directors that included the signing of several large Phase III contracts. In his leadership career, he has been responsible for growing and supporting sales teams generating in excess of $1 billion annually. Mr. Kwietniak holds a Bachelor of Science in business administration/management from The College of New Jersey.

Mark R. Ziebell has served as Vice President, General Counsel since June 2012 and Corporate Secretary since July 2012, and has been practicing corporate and securities law for over 25 years. Prior to joining us, Mr. Ziebell was a partner with the Costa Mesa, California office of Snell & Wilmer LLP. Mr. Ziebell has represented public and private companies in a wide range of corporate and securities matters, mergers and acquisitions, strategic alliance matters and corporate governance. He earned his B.S. in accounting in 1986 from the University of San Francisco and his Juris Doctorate in 1994 from the University of San Francisco School of Law. Prior to earning his law degree, Mr. Ziebell was a certified public accountant with BDO LLP in San Francisco, California.

Compensation Summary

The following table contains information with respect to the compensation for the fiscal years ended April 30, 2024, 2023 and 2022 for our Chief Executive Officer, Chief Financial Officer, and our three other most highly compensated executive officers at April 30, 2024 (the “Named Executive Officers” or “NEOs”), as determined pursuant to SEC regulations.

SUMMARY COMPENSATION TABLE

Grants of Plan-Based Awards For the Fiscal Year Ended April 30, 2024

The following table sets forth certain summary information with respect to each plan-based award granted to our Named Executive Officers during the fiscal year ended April 30, 2024.

GRANTS OF PLAN-BASED AWARDS FOR THE FISCAL YEAR ENDED APRIL 30, 2024

Outstanding Equity Awards at Fiscal Year-End

The following table sets forth certain information regarding unexercised stock options and unvested stock awards held by our Named Executive Officers as of the fiscal year ended April 30, 2024:

Option Exercises and Stock Vested

The following table sets forth certain information with respect to the exercise of stock options and vesting of stock awards by our Named Executive Officers during the fiscal year ended April 30, 2024.

Fiscal Year 2024 Non-Qualified Deferred Compensation Table

Our NEOs and certain other highly compensated employees are eligible to enroll in our Deferred Compensation Plan which provides them with an opportunity to defer up to 80% of their base compensation, 100% of their cash bonuses (if applicable), and up to 100% of certain RSU and PSU awards and thereby defer taxation of the cash and/or awards. Participants may elect to defer receipt for five or ten years from the grant date of the award, or until termination of employment, subject to earlier payment in the event of death and certain other circumstances. Distributions may be made, at the participant’s option, in a lump sum payment or in installments over a period of five or ten years.

The table below provides information on the non-qualified deferred compensation of our NEOs in fiscal year 2024.

Overview of Executive Severance Plan, Employment Agreements and Potential Payments Upon Termination or Change in Control

Executive Severance Plan

Effective December 5, 2022, based on the recommendation of the Compensation Committee following its review of current market practices in consultation with Aon, its independent compensation consultant, our Board approved and adopted an Executive Severance Plan (“Plan”) applicable to all individuals employed by us at the C-level and vice president level, including the NEOs (collectively, “Executive Participants”). To the extent an Executive Participant, including our NEOs, is currently a party to an existing agreement with us providing for severance benefits, such Executive Participant has the ability, following the occurrence of an event entitling such Executive Participant to receive severance benefits, to elect whether to receive the benefits under the existing agreement or the Plan.

Under the Plan, in the event of a termination of the Executive Participant’s employment by us without cause (as defined in the Plan) or a resignation by the Executive Participant for good reason (as defined in the Plan) three (3) or more months prior to a change in control (as defined in the Plan) or more than twelve (12) months following a change in control, the severance benefits for the Executive Participant shall generally consist of continued payment of base salary following the date of such Executive Participant’s termination of employment, plus reimbursement for the cost of continued group health insurance coverage, for the applicable severance period, which is twelve (12) months for C-level Executive Participants and six (6) months for Executive Participants who are vice presidents.

Under the Plan, in the event of a termination of the Executive Participant’s employment by us without cause or a resignation by the Executive Participant for good reason, in each case within three (3) months prior to a change in control or within twelve (12) months following a change in control, the severance benefits for the Executive Participant shall consist of the following: 

Receipt of severance benefits under the Plan is conditioned upon the Executive Participant’s execution of a separation agreement containing, among other provisions, a general release of all claims in favor of us.

Payments are designed to comply with Section 409A of the Internal Revenue Code (the “Code”). In addition, if any payment under the Plan would constitute an excess parachute payment within the meaning of Section 280G of the Code, the payments will be reduced to the minimum extent necessary so that no portion of any payment or benefit will constitute an excess parachute payment, provided however, that the reduction will be made only if and to the extent that such reduction would result in an increase in the aggregate payment and benefits to be provided, determined on an after tax basis (taking into account the excise tax imposed pursuant to Section 4999 of the Code, or any successor provision, or any other tax).

Employment Agreements

As of the end of fiscal year 2024, we are a party to certain legacy employment agreements with Messrs. Green, Hart and Ziebell and an offer letter with Mr. Kwietniak. Each employment agreement is subject to automatic one-year extensions annually unless either party gives written notice of such party’s intent not to renew the employment agreement at least ninety (90) days prior to the commencement of the next year’s period.

Each employment agreement/offer letter provides that the executive officer must devote his or her full business time to the performance of services to the Company. In addition, each executive officer has agreed to maintain the confidentiality of the Company’s proprietary information, and that all work product discovered or developed by him or her in the course of his or her employment belongs to the Company. Each executive officer has further agreed that he or she will not (i) compete with the Company, directly or indirectly, during the course of such executive’s employment within the United States or any foreign country in which the Company has done business or has actually investigated doing business or where its products are sold or distributed, or (ii) solicit Company employees or customers during the course of employment and for a period of one year following the termination of such executive’s employment.

The Company has the right to terminate each executive’s employment for “cause” if such executive (a) breaches in any material respect or fails to fulfill in any material respect his or her fiduciary duty owed to Company; (b) breaches in any material respect his or her employment agreement/offer letter or any other confidentiality or non-solicitation, non-competition agreement with the Company; (c) pleads guilty to or is convicted of a felony; (d) is found to have engaged in any reckless, fraudulent, dishonest or grossly negligent misconduct, (e) fails to perform his or her duties to the Company, provided that he or she fails to cure any such failure within thirty (30) days after written notice from Company of such failure, provided further, however, that such right to cure shall not apply to any repetition of the same failure previously cured under the agreement; or (f) violates any material rule, regulation or policy of the Company that may be established and made known to Company’s employees from time to time, including without limitation, the Company’s employee handbook. If an executive’s employment is terminated for “cause”, he or she shall have no right to receive any compensation or benefit under his or her employment agreement/offer letter after such termination other than base salary and paid time-off earned or accrued but unpaid as of the date of termination.

If we terminate Mr. Green’s, Mr. Hart’s or Mr. Ziebell’s employment without cause or Mr. Green, Mr. Hart or Mr. Ziebell, as the case may be, terminates his employment for “good reason”, such executive is entitled to (i) continued base salary and group insurance benefits for a period of twelve (12) months, and (ii) other than with respect to Mr. Green, the payment of any prorated earned target bonus, as determined by the Compensation Committee in its sole discretion. In addition, each executive shall have a period of time equal to the lesser of two years, for Mr. Ziebell, and twelve months, for Mr. Hart, following the date of such termination or until the original expiration date of the applicable option agreement to exercise any vested and outstanding stock options as of the date of such termination. An executive’s receipt of the foregoing severance benefits shall be conditioned upon such executive’s execution of a general release of known and unknown claims in favor of the Company and its affiliates. Pursuant to his offer letter, if we terminate Mr. Kwietniak’s employment without cause or he terminates his employment for “good reason”, Mr. Kwietniak is entitled to continuation of his base salary and group benefits paid in equal installments for a period of six months.

Each employment agreement defines “good reason” as (a) the Company relocates executive’s principal place of work to a location more than fifty (50) miles from the original location, without the executive’s prior written approval; (b) the executive’s position and/or duties are modified so that his or her duties are no longer consistent with the executive’s title; or (c) the executive’s annual base salary and related benefits, as adjusted from time to time, are reduced without his written authorization.

In the event of a change-in-control of Avid, if (i) Mr. Green’s, Mr. Hart’s, Mr. Kwietniak’s or Mr. Ziebell’s employment is terminated other than for cause within three (3) months prior or twenty-four (24) months following such change-in-control, or (ii) such executive officer terminates his or her employment for “good reason” within twenty-four (24) months, for Mr. Green and Mr. Hart, or twelve (12) months, for Mr. Kwietniak or Mr. Ziebell, following such change-in-control, the executive shall be paid (a) in the case of Mr. Kwietniak, six months’, and Mr. Green, twelve (12) months’ base salary, payable monthly in twelve equal installments, and in the case of Mr. Hart and Mr. Ziebell, twenty-four (24) months base salary, payable in a single lump sum, and (b) other than with respect to Mr. Green and Mr. Kwietniak, one hundred percent (100%) of such executive’s earned target bonus as determined by the Compensation Committee in its sole discretion. Mr. Hart and Mr. Ziebell will also be paid a single lump sum payment equal to group insurance benefits for the appliable NEO and his family for twenty-four (24) months and in the case of Mr. Kwietniak and his family payable monthly in equal installments for a period of six months. In addition, each of the executive officers’ outstanding equity awards shall immediately become fully vested, provided however that PSUs shall only vest as to the “target” level of performance, and, with respect to stock options, Mr. Green shall have a period of one year following the date of such termination, and Mr. Hart and Mr. Ziebell each shall have a period of time equal to the lesser of two years, for Mr. Hart following the date of such termination, and for Mr. Ziebell, following the date of the change-in-control, or until the original expiration date of the applicable option agreement to exercise any vested and outstanding stock options as of the date of such termination. An executive’s receipt of the foregoing severance benefits is conditioned upon such executive’s execution of a general release of known and unknown claims in favor of the Company and its affiliates.

Payments Upon Termination Without Cause or Resignation for Good Reason

The following table sets forth the potential payments to our NEOs assuming a termination without cause or resignation for good reason not in connection with a change in control with estimated benefits calculated as if the termination occurred on April 30, 2024:

Payments Upon a Termination in Connection with a Change in Control

The following table sets forth the potential payments to our NEOs assuming a termination without cause or resignation for good reason in connection with a change in control, with estimated benefits calculated assuming the change in control and termination of employment occurred on April 30, 2024:

Payments upon Death or Disability

In the event of the death or disability of Mr. Hart or Mr. Ziebell, as defined in their employment agreements, the Company will not pay any further compensation or benefits after such event other than the payment by the Company of group insurance benefits previously provided to such executive officers for a period of twelve (12) months. Amounts were calculated based on current premiums paid for executive’s benefits as follows:

Payments upon Executive’s Voluntary Resignation with Extended Notice Period

In the event that Mr. Ziebell voluntarily resigns, and in connection therewith provides ninety (90) days’ advance written notice (the “Extended Notice Period”) to the Company, the Company will pay Mr. Ziebell’s base salary then in effect and shall continue to provide other contractual benefits including group insurance benefits during the Extended Notice Period and for a period of six (6) months following the Extended Notice Period, provided Mr. Ziebell makes himself telephonically available to the Board of Directors and the Company’s executive team for up to two hours per week.

Compensation Committee Interlocks and Insider Participation

During the fiscal year ended April 30, 2024, the following non-employee directors served on the Compensation Committee: Dr. Catherine J. Mackey, Mr. Gregory P. Sargen and Ms. Jeanne A. Thoma. There are not currently, and during the fiscal year ended April 30, 2024, there were not, any interlocks of executive officers or directors of the Company serving on the compensation committee or equivalent committee of another entity, which has any director or executive officer serving on the Compensation Committee, other committees or the Board of Directors.

Certain Relationships and Related Transactions

Except for the compensation arrangements between us and our executive officers and directors described above under “Compensation Discussion and Analysis,” since May 1, 2023, we have not been a party to any transactions involving more than $120,000 and in which any director, nominee for director, executive officer, holder of more than 5% of our Common Stock or any immediate family member of the foregoing has a direct or indirect material interest, nor are any such transactions currently proposed.

The Audit Committee’s charter requires that it review and approve any related-party and conflicts of interest transactions. In considering related-party transactions, the Audit Committee considers the relevant available facts and circumstances, including, but not limited to, (i) the risks, costs and benefits to us, (ii) the impact on a director’s independence in the event the related party is a director, immediate family member of a director or an entity with which a director is affiliated, (iii) the terms of the transaction, (iv) the availability of other sources for comparable services or products, and (v) the terms available to or from, as the case may be, unrelated third parties or to or from employees generally. In the event a director has an interest in the proposed transaction, the director must recuse himself or herself from the deliberations and approval. In determining whether to approve, ratify or reject a related-party transaction, the Audit Committee evaluates whether, in light of known circumstances, the transaction is in, or is inconsistent with, our best interests and those of our stockholders.

Compensation Committee Report

The Report of the Compensation Committee shall not be deemed incorporated by reference by any general statement incorporating by reference this Proxy Statement into any filing under the Securities Act or under the Exchange Act, except to the extent that the Company specifically incorporates this information by reference, and shall not otherwise be deemed filed under such Acts.

The Compensation Committee of our Company has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with management and, based on such review and discussions, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement.

The Compensation Committee of the Board of Directors

Catherine J. Mackey, Ph.D. (Chair of the Compensation Committee)

Jeanne A. Thoma

Gregory P. Sargen

CEO PAY RATIO

As required by Item 402(u) of Regulation S-K, we are providing the following information about the relationship of the median of the annual total compensation of our employees (excluding Nicholas S. Green, our CEO on April 30, 2024) and the annual total compensation of our CEO. The pay ratio included below is a reasonable estimate calculated in a manner consistent with Item 402(u) of Regulation S-K. 

For fiscal year 2024, the median of the annual total compensation for our employees (other than our CEO) was $126,552, and the annual total compensation of our CEO, as reported in the Summary Compensation Table above was $4,475,343. Based on this information, for fiscal year 2024 the ratio of the annual total compensation of our CEO to the median of the annual total compensation of all of our employees was approximately 35 to 1. 

We took the following steps to identify the employee at the median of the annual total compensation of all our employees (other than our CEO), as well as to determine the annual total compensation of our median employee and our CEO: 

The SEC rules do not specify a single methodology for identification of the median employee or calculation of the pay ratio, and other companies may use assumptions and methodologies that are different from those used by us in calculating their pay ratio. Accordingly, the pay ratio disclosed by other companies may not be comparable to our pay ratio as disclosed above.

Pay Versus Performance

The disclosure included in this section is prescribed by SEC rules and does not necessarily align with how the Company or the Compensation Committee views the link between the Company’s performance and its NEOs’ pay. For a discussion of how the Company views its executive compensation structure, including alignment with Company performance, see “Compensation Discussion and Analysis” above.

The use of the term compensation actually paid, or CAP, is required by the SEC’s rules. Neither CAP nor the total amount reported in the Summary Compensation Table reflect the amount of compensation actually paid, earned or received during the applicable fiscal year. Per SEC rules, CAP was calculated by adjusting the Summary Compensation Table totals for the applicable fiscal year as described in the footnotes to the following table.

Pay Versus Performance Table

The Non-PEO NEOs included in average compensation shown in columns (d) and (e) above are as follows: