MEI Pharma Inc

COMPENSATION DISCUSSION AND ANALYSIS

This Compensation Discussion and Analysis describes the compensation strategy, policies, programs and practices for the named executive officers identified in the Summary Compensation Table. For fiscal year 2024, the named executive officers consist of David M. Urso, Chief Executive Officer and General Counsel, Justin J. File, Chief Financial Officer and Secretary and Richard G. Ghalie, M.D., Chief Medical Officer, to whom we collectively refer in this Compensation Discussion and Analysis as our named executive officers.

Compensation Philosophy and Objectives

We believe that the performance of our executive officers significantly impacts our ability to achieve our corporate goals. We, therefore, place considerable importance on the design and administration of our executive officer compensation program. This program is intended to enhance stockholder value by attracting, motivating and retaining qualified individuals to perform at the highest levels and to contribute to our growth and success. Our executive officer compensation program is designed to provide compensation opportunities that are tied to individual and corporate performance.

Our overall compensation philosophy has been to pay our executive officers an annual base salary and to provide opportunities, through cash and equity incentives, to deliver higher compensation if certain key performance goals are satisfied or exceeded. The primary principles of our fiscal year 2024 compensation strategy were:

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Compensation decisions are driven by a pay-for-performance philosophy;

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Compensation should reflect individual and corporate performance; and

•

Target annual compensation is competitively positioned against a peer group of similar companies.

The Compensation Committee’s Process

The Compensation Committee acts on behalf of the Board with respect to fulfilling the Board’s responsibilities to oversee our compensation policies, plans and programs and reviewing and determining, as appropriate, the compensation to be paid to executive officers and directors. To achieve this task, the Compensation Committee (i) reviews and approves corporate performance goals and objectives that support and reinforce our long-term strategic goals and compensation plans; (ii) reviews the individual performance of the executive officers; (iii) establishes policies with respect to equity compensation arrangements, timing and pricing of equity awards for newly hired employees, promotions and annual grants for executive and non-executive employees and directors; (iv) reviews regional and industry-wide compensation practices and trends to assess the propriety, adequacy and competitiveness of our executive compensation programs among comparable companies in our industry; (v) reviews and approves the terms of any employment agreements, severance agreements, change-of-control protections and any other compensation arrangements of the executive officers; (vi) performs and considers a compensation risk assessment; and (vii) considers stockholder feedback and Say-on-Pay voting results.

With respect to compensation of our Chief Executive Officer, the Compensation Committee evaluates the Chief Executive Officer’s performance in light of relevant performance goals and objectives, taking into account the policies of the Compensation Committee and, with respect to long-term incentive compensation, stockholder return and the results of the most recent stockholder advisory vote on executive compensation. The Compensation Committee reviews and approves (or if appropriate, recommends to the Board for final determination and approval) individual and corporate performance goals and objectives of our other executive officers. The Compensation Committee considers the recommendations of the Chief Executive Officer with respect to the compensation of our other executive officers. The Compensation Committee also makes recommendations to the Board with respect to this Compensation Discussion and Analysis section and recommends that such section be included in any of our annual reports on Form 10-K, registration statements, Proxy statements or information statements.

The Compensation Committee meets at least once a year or more frequently as its members deem necessary or appropriate. Under its charter, the Compensation Committee has the authority, in its sole discretion, to retain or obtain the advice of a compensation consultant, legal counsel or other advisors as the Compensation Committee may determine to assist in the performance of the Compensation Committee’s duties and responsibilities, only after taking into consideration the factors prescribed by the SEC and Nasdaq that bear upon the adviser’s independence.

Setting Executive Compensation

The Compensation Committee considers peer group analysis as a component of its overall executive compensation decision process, but it does not attempt to set executive compensation to a specific benchmark level, or percentile as compared to executive compensation levels at other companies. The Compensation Committee determines the mix of compensation of each executive officer based on its review of such competitive data and an assessment of the individual’s performance. We believe our approach to compensation does not encourage excessive risk-taking by our executives as it is not a market outlier and is based on a typical mix of short- and long-term compensation tied to both internal objectives and to stockholder value.

Our peer group of companies for fiscal year 2024 consisted of 20 similar publicly traded drug development companies, all approved by the Compensation Committee, with input from management and F. W. Cook, our compensation consultant. The peer group is composed of drug development companies with a broadly similar market cap, (median peer market cap at the time the peer data were reviewed by the Committee in June 2023 was $111 million), generally without material revenue from commercial products, and with emphasis on oncology drug development companies, as follows:

The Compensation Committee believes that our base compensation, cash incentives and equity programs reward the achievement of defined corporate goals and objectives. This is critical for ensuring a competitive program that retains our existing executive officers and allows us to hire new executive officers, particularly considering the competitive nature of our industry.

The peer data were used as context for setting fiscal year 2024 executive officer compensation. The Compensation Committee does not set a target benchmark, but in fiscal year 2024 the value of total direct compensation was below the median for the CEO and for all other named executive officers, and Mr. Urso’s total compensation value in fiscal year 2024 as our new CEO was considerably lower than our prior CEO, Dr. Gold’s, compensation value in fiscal year 2023. Further, Mr. Urso was not provided a fiscal year 2024 equity award because it was included in his fiscal year 2023 equity award. The fiscal year 2023 option value for Mr. Urso includes both his regular annual fiscal year 2023 award as COO and General Counsel in July 2022 and a second grant to recognize his promotion to CEO in June 2023, as well as his annual CEO equity award in fiscal year 2024.

Role of Stockholder Say-on-Pay Votes

At our annual meeting of stockholders held in December 2023, approximately 94% of the shares voted at the meeting approved, on an advisory basis, the compensation of our named executive officers. The Compensation Committee considers input from stockholders, its compensation consultant and proxy advisors, when assessing its compensation philosophy and the components of its compensation program, giving further consideration to the level of attainment of corporate goals and to the compensation data of our peer group so that compensation decisions are broadly consistent with market practice.

Elements of Compensation

Each executive officer’s compensation has three key elements: (i) base salary, (ii) performance-based cash incentives and (iii) equity-based compensation. These elements of executive compensation are intended to align the interests of our executive officers with those of our stockholders.

Base Salary

Base salaries serve to provide a fixed amount of compensation to our executive officers for successfully fulfilling their responsibilities. We establish base salaries for our executive officers when they join us or upon promotion. Base salaries for executive officers are reviewed and determined by the Compensation Committee annually during the first fiscal quarter, following consultation with our compensation consultant. The Compensation Committee did not increase the salaries of Mr. Urso and Mr. File during fiscal year 2024. The salary of Dr. Ghalie was increased by 5% in fiscal year 2024.

Performance-based Cash Incentives

The Compensation Committee believes that allocating a meaningful amount of our executive officers’ total cash compensation to the achievement of corporate goals and objectives aligns their interests with those of our stockholders. The Compensation Committee establishes annual corporate incentive bonus targets for each of our executive officers, expressed as a percent of base salary. Fiscal year 2024 bonus targets as a percent of base salary were set at the start of the fiscal year at 50% for Mr. Urso, and 40% for Dr. Ghalie and Mr. File. The corporate goals and objectives are generally critical path activities or strategic initiatives designed to move forward our clinical and operating activities and enhance stockholder return.

The goals were as objective as possible in both their definition and their scoring at the end of the period, though scoring goals included a subjective element to recognize the quality of achievements.

The following is a description of the primary corporate goals for fiscal year 2024, which guided the Compensation Committee in determining total compensation.

Description

Voruciclib

1) Clinical trial cohort enrollment target

2) FDA briefing book submission for proposed protocol amendment

3) Completion of preclinical and clinical data package

ME-344

4) Clinical trial cohort enrollment target

5) Completion of preclinical and clinical data package

Financial

6) Maintain sufficient funds for a minimum cash balance as of fiscal year end

The Compensation Committee determined we had met 91.5% of target based on achievement of the goals above. The named executive officers were paid 91.5% of their target bonus for the corporate achievement without any individual adjustment.

Equity-based Compensation

The Compensation Committee believes that long-term value creation is achieved through an ownership culture that encourages performance by our executive officers through stock and stock-based awards. This potential reward for stockholder value creation is also key to our retention strategy. Under our Amended and Restated MEI Pharma, Inc. 2008 Omnibus Equity Compensation Plan (the 2008 Equity Plan), we may award incentive and non-qualified stock options, stock appreciation rights, restricted stock, restricted stock units, and performance shares and units. Stock options expire after 10 years, have an exercise price equal to the fair market value at grant, typically vest 25% after one year and in equal monthly installments thereafter over the next 36 months and have a three-month post-termination exercise period. All equity awards to NEOs in fiscal year 2024 were stock options because they are naturally performance-based without any value delivery unless the stock price increases after grant.

The regular annual equity grant cycle occurs at the start of the fiscal year and at the start of fiscal year 2024, we granted to Dr. Ghalie, Chief Medical Officer, options to purchase 30,000 shares of our common stock with an exercise price of $7.01, which was the closing sales price on the date of grant. This option award amount had a grant date fair value that that was less than half the median of the peer companies and was based on MEI's assessment of the relative importance of the executive to the future, the need to retain them, and market data for their position. Mr. Urso was not provided an option award in fiscal year 2024 due to the grant previously provided upon becoming CEO in June 2023 (fiscal year 2023). Mr. File was not provided an option award in fiscal year 2024 because he was granted an award upon being hired in June 2023 (fiscal year 2023). We grant options because they have a natural performance requirement for the stock price to increase after a grant. All options granted before and during 2024 are currently underwater as of the date of the filing of this Annual Report and do not provide any value at our current share price.

Executive Benefits and Perquisites

We offer benefit programs to our employees, including named executive officers, which include paid time off, health insurance, a company funded HSA account and a company sponsored 401(k) plan. Our executive officers generally do not receive any supplemental retirement benefits or perquisites and participate in the above listed benefit programs on the same basis as other full-time employees.

Severance and Change in Control Agreements

Each of Mr. Urso’s, Dr. Ghalie’s and Mr. File’s employment agreements provides for certain severance payments upon the applicable employee’s termination by us, other than for cause or by the applicable employee for good reason, as such terms are defined in the respective employment agreement. Upon such a termination of employment, we will: (i) make a payment to the applicable employee in lieu of notice in an amount equal to twelve months of such employee’s base salary (as in effect at the time of such employee’s termination from employment), and (ii) accelerate the vesting of the applicable employee’s options so that such employee will be vested in the same number of shares of common stock subject to the options as if such employee had continued to be employed by us for an additional twelve months. Such payment and additional option vesting will be conditional upon the execution of a customary release of claims in favor of us and our affiliates, in a form prescribed by us. The payment in lieu of notice will be paid to the applicable employee in a single lump sum payment as soon as administratively practicable after the maximum review and revocation period for the release agreement as may be required under applicable law, if any, or such earlier date as determined in our sole discretion, but in no event more than 60 days after the applicable employee’s termination of employment. If their employment had been terminated in accordance with the foregoing provisions on June 30, 2023, Mr. Urso, Dr. Ghalie and Mr. File would have been entitled to payments for 12 months base salary in the amount of $614,000, $503,165, and $450,000, respectively, and payments for fiscal year 2024 bonus funded at 91.5% target of $280,905, $184,158, and $164,700, respectively. Each would be entitled to 12 months of option vesting as follows: Mr. Urso 39,582 shares, Dr. Ghalie, 20,385 shares and Mr. File 13,326 shares. The intrinsic values of the option vesting acceleration on June 30, 2024, would have been nil for all three NEOs because all options were underwater. In the event of a change in control of MEI Pharma, as defined in the 2008 Equity Plan, unless the Compensation Committee of the Board determines otherwise, all options granted to Mr. Urso, Dr. Ghalie and Mr. File will accelerate and become fully exercisable effective upon the date of the change in control. For all three NEOs, there was no intrinsic value of unvested stock options as of June 30, 2024, upon a change in control.

Mr. Urso and Dr. Ghalie’s employment as CEO and CMO, respectively, were terminated by us without cause on August 1, 2024. Mr. Urso and Dr. Ghalie’s severance was paid pursuant to their employment agreements dated June 2, 2023 and January 16, 2024, respectively, with 12 months base salary and accelerated vesting of the portion of their stock options that would have vested over the next 12 months, plus their fiscal year 2025 bonus based on performance and board discretion. Further, a total of 61,646 options accelerated for Mr. Urso and 18,861 for Dr. Ghalie, reflecting the number of shares would have vested during the next 12 months, respectively. Mr. Urso’s and Dr. Ghalie’s vested options may be exercised after separation of service for one year, not to exceed their original term.

Tax and Accounting Considerations

The tax and accounting consequences to us of certain compensation elements are important considerations for the Compensation Committee when evaluating and recommending compensation packages for our executive officers. Generally, the Compensation Committee seeks to balance its objective to create an effective compensation program that attracts, retains and rewards executives in order to maximize the return to stockholders with the need for appropriate tax and accounting consequences of such compensation.

In addition to considering the tax consequences, the Compensation Committee considers the accounting consequences of its decisions, including the impact of expenses being recognized in connection with equity-based awards, in determining the size and form of different equity-based awards.

CEO Pay Ratio

SEC rules require us to disclose the total annual compensation of our principal executive officer for fiscal year 2024, who was David Urso, our President and Chief Executive Officer, the median of the total annual compensation of all employees other than our principal executive officer, as well as their ratio to each other (the CEO Pay Ratio). Total annual compensation for our principal executive officer and for the median of the total annual compensation of all employees is calculated in accordance with SEC rules applicable to the Summary Compensation Table. For fiscal year 2024, these amounts were as follows:

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Our principal executive officer’s total annual compensation: $894,905

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Our median employee’s total annual compensation: $322,172

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CEO Pay Ratio: 2.78 to 1

In determining the median compensated employee, we chose June 30, 2024, as the determination date. As of this date, we had 27 employees, excluding our principal executive officer. We annualized compensation of employees who were not employed with us for the full fiscal year. In determining our median compensated employee and calculating the CEO Pay Ratio, we did not use any of the exemptions permitted under SEC rules, nor did we rely upon any material assumptions, adjustments or estimates.

We believe that the CEO Pay Ratio set forth above is a reasonable estimate for fiscal year 2024, determined in a manner consistent with SEC rules. The SEC rules for identifying the median compensated employee and calculating the CEO Pay Ratio based on that employee’s total annual compensation permit companies to adopt a variety of methodologies, to apply certain exemptions and to make certain assumptions, adjustments or estimates that reflect their compensation policies. Accordingly, the CEO Pay Ratio may not be comparable to the pay ratios reported by other companies, which may have used different methodologies, assumptions, adjustments or estimates in calculating their pay ratios.

COMPENSATION COMMITTEE REPORT

Our Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K and contained within this Proxy Statement with management. Based on such review and discussions, our Compensation Committee recommended to our Board that the Compensation Discussion and Analysis be included as of the date of filing for this Annual Report, by the members of the Compensation Committee of the Board:

Dr. Nicholas R. Glover

Dr. Thomas C. Reynolds

Mr. Steven Wood

This Section is not soliciting material, is not deemed filed with the SEC and is not to be incorporated by reference in any filing of our under the Exchange Act or the Securities Act, other than in our Annual Report on Form 10-K where it shall be deemed to be furnished, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing.

EXECUTIVE COMPENSATION

Our Executive Officers

Our named executive officers for the fiscal year ended June 30, 2024, were:

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David M. Urso, President and Chief Executive Officer

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Richard G. Ghalie, Chief Medical Officer

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Justin J. File, Chief Financial Officer

Summary Compensation Table

The table below sets forth for the fiscal years ended June 30, 2024 and 2023, the compensation of our named executive officers.

(1)

Represents the aggregate grant date fair value of restricted stock unit awards (RSUs) granted in accordance with Financial Accounting Standards Board, Accounting Standards Codification, Topic 718, Stock Compensation (ASC Topic 718), calculated based on the closing market price of our common stock on the date of grant.

(2)

Represents the aggregate grant date fair value of options granted in accordance with ASC Topic 718.

(3)

Mr. Urso received a bonus of 46% of his base salary for the fiscal year ended June 30, 2024, based upon the compensation committee’s determination to award bonuses at 91.5% of target levels. Mr. Urso received a bonus of 38% of his base salary for the fiscal year ended June 30, 2023, based upon the compensation Committee’s determination to award bonuses at 77.5% of target levels.

(4)

Dr. Ghalie received a bonus of 37% of his base salary for the fiscal year ended June 30, 2024, based on the compensation committee's determination to award bonuses at 91.5% of target levels. Dr. Ghalie received a bonus of 31% of his base salary for the fiscal year ended June 30, 2023, based on the compensation committee's determination to award bonuses at 77.5% of target levels.

(5)

Mr. File received a bonus of 37% of his base salary for the fiscal year ended June 30, 2024, based upon the compensation committee’s determination to award bonuses at 91.5% of target levels.

(6)

In accordance with SEC rules, the compensation described in this table does not include various health and welfare or other benefits received by our named executive officers that were generally available to all of our regular, full-time employees, as well as certain perquisites and other benefits received by our named executive officers that, in the aggregate, were less than $10,000 for any officer.

(7)

Effective August 1, 2024, Mr. Urso resigned as our President and Chief Executive Officer. Between June 2, 2023 and August 1, 2023, Mr. Urso was our President and Chief Executive Officer. Prior June 2, 2023, Mr. Urso, was our Chief Operating Officer and General Counsel.

(8)

Effective August 1, 2024, Mr. File became our acting Chief Executive Officer, in addition to his Chief Financial Officer role that was effective August 1, 2023.

(9)

Dr. Ghalie resigned as our Chief Medical Officer on August 1, 2024.

Employment Agreements

We have entered into written employment agreements with each of the named executive officers, which set forth the terms of their respective employments.

Employment Agreement between David M. Urso and MEI Pharma

On May 31, 2023, the MEI board of directors appointed Mr. Urso as President and Chief Executive Officer of MEI, effective as of June 2, 2023. Mr. Urso was also elected as a member of the MEI board of directors, effective as of June 8, 2023 through August 1,

2024. Mr. Urso served as a member of the class of directors whose term was to expire at the 2025 annual meeting of MEI’s stockholders or until his earlier resignation or removal.

In connection with Mr. Urso’s appointment as President and Chief Executive Officer, Mr. Urso and MEI entered into a new employment agreement (the CEO Employment Agreement), effective as of June 2, 2023, that replaced the existing employment agreement dated March 6, 2014, between MEI and Mr. Urso, as amended by Amendment No. 1, dated July 12, 2018. The CEO Employment Agreement provided for an annual base salary of $614,000, with a target annual bonus opportunity of 50% of base salary. Mr. Urso was eligible to participate in MEI’s health, retirement, expense reimbursement and other benefit plans.

The CEO Employment Agreement provided for a grant as of June 2, 2023, of an option to purchase a number of shares of MEI’s common stock, under MEI’s equity compensation plan, equal to 2.5% of MEI’s outstanding shares as of the date of grant, with vesting over a 4-year period, full vesting on a change in control, and other terms and conditions consistent with the CEO Employment Agreement and grants made to other senior executives (the CEO Initial Grant). The exercise price of the CEO Initial Grant was equal to the Nasdaq closing price per share of MEI stock on the date of grant. The CEO Employment Agreement further provided for a stock option grant to be made on the closing date of the Merger, contingent on the consummation of the Merger and subject to Mr. Urso’s being employed by or providing service to MEI or an affiliate at the time of grant (i.e., the closing date of the Merger), that was equal to 2.5% of the outstanding shares of MEI on the closing date of the Merger (calculated immediately after the effective time of the Merger), less the number of MEI shares underlying the CEO Initial Grant; provided, however, that the total number of shares covered by options granted to Mr. Urso in a calendar year shall not exceed 200,000 shares pursuant to the terms of the MEI’s equity compensation plan (the CEO Second Grant). The exercise price of the CEO Second Grant was equal to the Nasdaq closing price per share of MEI stock on the date of grant (the closing date of the Merger). The CEO Second Grant had the same vesting terms as the CEO Initial Grant.

If the full number of options called for pursuant to the CEO Second Grant could not be granted on the closing date of the Merger in 2023 because of the per person share limit under the equity compensation plan, then an option for the number of shares that could not be granted on the closing date would be granted on January 2, 2024 (the Top Off Grant); provided that, if on January 2, 2024, MEI’s equity compensation plan does not have sufficient shares available to make the Top Off Grant, such grant would be made on the first subsequent date on which MEI did have sufficient shares under the equity compensation plan. To receive the Top Off Grant, Mr. Urso must have been employed by or providing services to MEI or an affiliate on the applicable date of grant. The exercise price of the Top Off Grant would be equal to the Nasdaq closing price per share of MEI stock on the date of grant of the Top Off Grant, and the Top Off Grant would have the same vesting terms as the CEO Initial Grant. If the Merger was not consummated, then in certain circumstances a CEO Second Grant (and a Top Off Grant, if applicable) would be made to Mr. Urso according to the terms and conditions of the CEO Employment Agreement. On May 31, 2023, the MEI board of directors approved the CEO Initial Grant, the CEO Second Grant, and the Top Off Grant, as applicable, to be effective on their respective dates of grant.

For 2024 and subsequent years, Mr. Urso would be eligible to receive equity awards on similar terms as other senior executives of MEI. MEI would pay Mr. Urso’s legal fees in connection with negotiation of the CEO Employment Agreement and ancillary agreements, up to $7,500.

Under the CEO Employment Agreement, if Mr. Urso’s employment was terminated by MEI without cause or Mr. Urso resigned for good reason, Mr. Urso would be eligible to receive the following severance benefits if he signed an effective release of claims: (i) lump sum payment equal to 12 months of his base salary, (ii) if he elected COBRA health care continuation coverage, MEI would pay the monthly COBRA premium for 12 months, (iii) payment of a pro-rata annual bonus, if any, for the year of termination, and (iv) accelerated vesting of a portion of Mr. Urso’s outstanding stock options equal to the number of options that would have vested if he had continued to be employed by MEI for 12 months following termination. The CEO Employment Agreement also provided that if, within 3 months before a change in control, MEI terminated Mr. Urso’s employment without cause at the request of the other party to the change in control transaction, or if, upon or within 2 years following a change in control, Mr. Urso’s employment was terminated by MEI without cause or Mr. Urso resigned for good reason, Mr. Urso’s outstanding stock options would fully vest and become exercisable as of his termination date, provided that he signed an effective release.

In the event that Mr. Urso’s employment was terminated due to his death or disability, vesting of a portion of Mr. Urso’s outstanding stock options would accelerate equal to the number of options that would have vested if he had continued to be employed by MEI for 12 months following termination, subject to his execution of an effective release in the event of disability.

Mr. Urso continued to remain subject to his Employee Proprietary Information and Inventions Agreement, dated April 7, 2014.

Employment Agreement between Richard G. Ghalie and MEI Pharma

In connection with Dr. Ghalie’s appointment as Chief Medical Officer, effective May 3, 2021, we entered into an amendment to his Employment Letter, dated February 17, 2016 (as amended, the Ghalie Employment Letter). The Ghalie Employment Letter provided for an annual base salary of $463,000, and a stock option award to purchase 75,000 shares of our common stock. Effective July 1, 2021, pursuant to the terms of the Ghalie Employment Letter, Dr. Ghalie was eligible to earn an annual cash bonus in an amount up to a maximum of 40% of the base salary based on his achievement of milestones established by the Compensation Committee of the Board.

Dr. Ghalie could terminate his employment at any time other than for Good Reason (as defined in the Ghalie Employment Letter), upon providing one (1) month advance notice to us. Dr. Ghalie could terminate his employment with Good Reason by providing us with notice within sixty (60) days of the event giving rise to the Good Reason (and we did not cure the Good Reason event within thirty (30) days after receiving notice). We had the right to terminate the Ghalie Employment Letter with or without Cause (as defined in the Ghalie Employment Letter) at any time. If Dr. Ghalie’s employment was terminated by us without Cause or by Dr. Ghalie for Good Reason, Dr. Ghalie would be entitled to (i) a lump sum payment in an amount equal to twelve (12) months of his base salary and (ii) accelerated vesting of his options such that Dr. Ghalie will be vested in the same number of options as if he had continued to be employed by us for an additional twelve (12) months, subject to his execution and nonrevocation of a release of claims. The Ghalie Employment Letter contained confidentiality provisions.

Employment Agreement between Justin J. File and MEI Pharma

In connection with Mr. File’s appointment as Chief Financial Officer, Mr. File and MEI entered into an employment agreement (the CFO Employment Agreement), effective as of June 12, 2023. The CFO Employment Agreement provides for an annual base salary of $450,000, with a target annual bonus opportunity of 40% of base salary. Mr. File will be eligible to participate in MEI’s health, retirement, expense reimbursement and other benefit plans.

The CFO Employment Agreement provides for a grant as of June 12, 2023 of an option to purchase a number of shares of MEI’s common stock, under MEI’s equity compensation plan, equal to 0.8% of MEI’s outstanding shares as of the date of grant, with vesting over a 4-year period, full vesting on a change in control, and other terms and conditions consistent with the CFO Employment Agreement and grants made to other senior executives. The exercise price of the CFO Initial Grant will be equal to the Nasdaq closing price per share of MEI stock on the date of grant. For 2024 and subsequent years, Mr. File will be eligible to receive equity awards on similar terms as other senior executives of MEI.

Under the CFO Employment Agreement, if Mr. File’s employment is terminated by MEI without cause or Mr. File resigns for good reason, Mr. File will be eligible to receive the following severance benefits if he signs an effective release of claims: (i) lump sum payment equal to 12 months of his base salary, (ii) if he elects COBRA health care continuation coverage, MEI will pay the monthly COBRA premium for 12 months, (iii) payment of a pro-rata annual bonus, if any, for the year of termination, and (iv) accelerated vesting of a portion of Mr. File’s outstanding stock options equal to the number of options that would have vested if he had continued to be employed by MEI for 12 months following termination. The CFO Employment Agreement also provides that if, within 3 months before a change in control, MEI terminates Mr. File’s employment without cause at the request of the other party to the change in control transaction, or if, upon or within 2 years following a change in control, Mr. File’s employment is terminated by MEI without cause or Mr. File resigns for good reason, Mr. File’s outstanding stock options will fully vest and become exercisable as of his termination date, provided that he signs an effective release.

In the event that Mr. File’s employment is terminated due to his death or disability, vesting of a portion of Mr. File’s outstanding stock options will accelerate equal to the number of options that would have vested if he had continued to be employed by MEI for 12 months following termination, subject to his execution of an effective release in the event of disability.

In connection with our announcement on July 22, 2024 to pursue strategic alternatives, Mr. File and MEI entered into an amendment to his employment agreement effective August 1, 2024. Under the amendment, Mr. File was appointed by the Board to serve in the additional capacity of Acting Chief Executive Officer and provided an increase in his annual base salary to $550,000 and an increase in his target annual bonus opportunity to 50% of base salary. In addition, Mr. File is eligible to receive a success fee if the closing cash balance as of the first to occur of (i) December 31, 2024 or (ii) the closing date of a change in control (the Measurement Date) exceeds a specified amount determined by the Board. The success fee will equal 10% of the closing cash balance of the Company in excess of the specified amount as of the Measurement Date and will be paid in a lump sum cash payment on the first to occur of (i) June 30, 2025, or (ii) Mr. File’s termination of employment by the Company without cause, subject to Mr. File remaining employed by the Company through the payment date of the success fee.

Grants of Plan Based Awards for Fiscal Year Ended June 30, 2024

(1) The Board established single bonus targets and as disclosed in the Summary Compensation Table, determined to pay out bonuses at 91.5% of the target levels.

Outstanding Equity Awards at June 30, 2024

The following table provides information on all stock options and RSUs held by our named executive officers on June 30, 2024.

(1)

Twenty-five percent of the options vested on June 3, 2024; the remaining 75% of the options were expected to vest in equal monthly installments over the following 36 months.

(2)

Twenty-five percent of the options vested on July 5, 2023; the remaining 75% of the options vest in equal monthly installments over the following 36 months.

(3)

Twenty-five percent of the options vested on July 5, 2022; the remaining 75% of the options vest in equal monthly installments over the following 36 months.

(4)

Twenty-five percent of the options vested on July 2, 2021; the remaining 75% of the options vested in equal monthly installments over the following 36 months.

(5)

Twenty-five percent of the options vested on July 1, 2020; the remaining 75% of the options vested in equal monthly installments over the following 36 months.

(6)

Twenty-five percent of the options vested on July 12, 2019; the remaining 75% of the options vested in equal monthly installments over the following 36 months.

(7)

Twenty-five percent of the options vested on June 22, 2019; the remaining 75% of the options vested in equal monthly installments over the following 36 months.

(8)

Twenty-five percent of the options vested on July 6, 2018; the remaining 75% of the options vested in equal monthly installments over the following 36 months.

(9)

The options vested in equal installments over 36 months from the grant date of July 29, 2016.

(10)

The options vested in equal installments over 36 months from the grant date of July 28, 2015.

(11)

The options vested in equal installments over 36 months from the grant date of March 7, 2016.

(12)

The options vested in equal installments over 36 months from the grant date of July 14, 2016.

(13)

Twenty-five percent of the options vested on May 3, 2022; the remaining 75% of the options vest in equal monthly installments over the following 36 months.

(14)

Twenty-five percent of the options vested on July 7, 2018; the remaining 75% of the options vested in equal monthly installments over the following 36 months.

(15)

Twenty-five percent of the options vested on June 12, 2024, the remaining 75% of the options vest in equal monthly installments over the following 36 months.

(16)

Twenty-five percent of the options vested on July 1, 2024, the remaining 75% of the options vest in equal monthly installments over the following 36 months.

(17)

In connection with Mr. Urso's and Dr. Ghalie's Separation and Release Agreements dated August 1, 2024, all outstanding options vest and become exercisable on an accelerated basis as of the transition date (August 1, 2024) for the same number of shares that would have vested had they continued to be employed by MEI through the first anniversary of the transition date (August 1, 2025).

Option Exercises and Stock Vested

Mr. Urso, Dr. Ghalie and Mr. File did not exercise any stock options during the fiscal year ended June 30, 2024. 1,000 RSUs vested for Dr. Ghalie during the fiscal year ended June 30, 2023.

Pay Versus Performance

Provided below is our pay versus performance disclosure as required pursuant to Item 402(v) of Regulation S-K promulgated under the Exchange Act. As required by Item 402(v), we have included:

•

A description of our most important measures that our Compensation Committee used in fiscal year 2024 to link a measure of pay calculated in accordance with Item 402(v) (referred to as compensation actually paid, or CAP) to our performance;

•

A table that compares the total compensation of our named executive officers’ (also known as NEOs) as presented in the Summary Compensation Table (SCT) to CAP and that compares CAP to specified performance measures; and

•

Graphs that describe:

o

the relationships between CAP and our cumulative total shareholder return (TSR), GAAP Net Income, and our selected measure, Total Cash (defined as all cash, cash equivalents, and investment held to maturity); and

o

the relationship between our TSR and the TSR of the Nasdaq Biotechnology Index (Peer Group TSR).

Note: pursuant to Item 402(v)(8), MEI, as a smaller reporting company (SRC), has provided the information required by 402(v) for three years, instead of five years and is not required to provide the disclosure required by 402(v)(2)(iv) or 402(v)(5) with respect to the total shareholder return of any peer group, or our-Selected Measure disclosure required by 402 (v)(2)(vi), or the Tabular List provided pursuant to 402(v)(6).

Given our current pay program, the only difference between the SCT and CAP amounts for our NEOs is the value of equity awards, which for purposes of the SCT is based on the grant date fair value of equity awards granted during the year, and for purposes of CAP is based on the year over year change in the fair value of equity awards that are unvested as of the end of the year, or that vested, or were forfeited during the year.

This disclosure has been prepared in accordance with Item 402(v) and does not necessarily reflect value realized by the NEOs from their equity awards. Please refer to our Compensation Discussion and Analysis, above, for a discussion of our executive compensation program objectives and the ways in which we align executive compensation with performance.

Our Most Important Metrics Used for Linking Pay and Performance. As required by Item 402(v), below are the most important metrics linking CAP to performance for fiscal year 2024. Besides stock price, the only financial performance measure the Committee used to link executive compensation to performance in 2024 was Total Cash (total cash, cash equivalents and short-term investments) on the consolidated balance sheets as of June 30, 2024.

Other non-financial performance factors considered when making compensation decisions include clinical milestones, individual performance, scope of responsibility, and an annual assessment of pay competitiveness within the market.

Pay Versus Performance Table. In accordance with Item 402(v) and under rules adopted by the SEC pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, we are providing the tabular disclosure for our Chief Executive Officer (our Principal Executive Officer or PEO) and the average of our NEOs other than the PEO for fiscal years 2022, 2023 and 2024.

(1)

The PVP table reflects required disclosures for fiscal years 2022, 2023 and 2024. The following table reflects our Principal Executive Officer (PEO) and non-PEO NEOs in each of the fiscal years presented:

(2)

The amounts shown for CAP have been calculated in accordance with Item 402(v) of Regulation S-K and do not reflect compensation earned, realized, or received by our NEOs. These amounts reflect the Summary Compensation Table Total with certain adjustments as described in footnote 3 below.

(3)

Compensation Actually Paid (CAP) is calculated by taking Summary Compensation Table total compensation: a) less the stock award and stock option grant values; b) plus the year over year change in the fair value of stock and option awards that are unvested as of the end of the year, or that vested, or were forfeited during the year. We have not paid dividends historically and does not sponsor any pension arrangements; thus, no adjustments are made for those items. Reconciliation of the Summary Compensation Table total compensation and CAP is summarized in the following table:

(4)

The Peer Group TSR set forth in this table utilizes the Nasdaq Biotechnology Index, which we also utilized in the stock performance graph required by Item 201(e) of Regulation S-K included in our Annual Report for the fiscal year ended June 30, 2019. As a SRC, we do not have to provide, and have not provided, this stock performance graph in subsequent annual reports. The comparison assumes $100 was invested for the period starting June 30, 2021, through the end of the listed year in us and in the Nasdaq Biotechnology Index, respectively. Historical stock performance is not necessarily indicative of future stock performance.

(5)

We determined Total Cash to be the most important financial performance measure used to link our performance to CAP to our PEO and Non-PEO NEOs in 2024. Total Cash is defined as total cash, cash equivalents and short-term investments.

Relationship between CAP and TSR. The chart below reflects the relationship between the PEO and average non-PEO NEO CAP versus our TSR and the Peer Group TSR.

Relationship between CAP and GAAP Net Income (Loss). The chart below reflects the relationship between the PEO and average non-PEO NEO CAP and our GAAP Net Income (Loss).

Relationship between CAP and Total Cash (our Selected Measure). The chart below reflects the relationship between the PEO CAP and average non-PEO NEO CAP and our Total Cash.

Compensation of Directors

The following table provides details of the fees paid to our non-executive directors who served on the Board for the fiscal year ended June 30, 2024.

(1) For the fiscal year ended June 30, 2024, each of our non-executive directors received an annual cash retainer of $45,600. In addition to the annual cash retainer, the chair received additional annual compensation of $35,000, and each Board Committee chair received additional compensation as follows: Audit Committee: $20,000; Compensation Committee: $15,000; Nominating and Governance Committee: $10,000; and Strategic Committee: $10,000. Committee members not receiving compensation as a committee chairperson received additional compensation as follows: Audit Committee: $10,000; Compensation Committee: $7,500; Nominating and Governance Committee: $5,000; and Strategic Committee: $7,000. Such amounts are pro-rated for periods of service less than the full fiscal year.

(2)

Represents the aggregate grant date fair value of options granted in accordance with FASB ASC Topic 718. All stock options granted to non-employee directors in the fiscal year ended June 30, 2024, were granted under our 2008 Equity Plan, and are ten-year options with an exercise price equal to the closing market price of our common stock on the date of grant. During the fiscal year ended June 30, 2024, Mr. Baltic, Mr. Driscoll, Dr. Glover, Mr. Gold, Ms. Howson, Mr. Kango, and Dr. Reynolds all received an annual grant of 10,000 options at an exercise price of $7.01 per share that vest ratably each month over 12 months, subject to continued service on the Board. Upon joining the Board during the fiscal year ended June 30, 2024, Mr. Flynn and Mr. Wood each received a prorated annual grant of 6,700 options as well as a new director grant of 10,000 options, both at an exercise price of $7.01 per share. The annual grant vests ratably each month over seven months and the new director grant vests ratably each month over three years, subject to continued service on the Board. Mr. Datoo does not receive options, but instead receives in cash the vested portion of the grant date fair value of those options that would have been granted in accordance with FASB ASC Topic 718 (see note 10 below).

(3)

Mr. Baltic received cash compensation of $80,600 in connection with his service as chair of the board and $10,000 in connection with his service on the Audit Committee, $5,000 in connection with his service on the Nominating and Governance Committee and $833 in connection with his service as chair of the Strategic Committee. Mr. Baltic resigned from the board effective July 22, 2024.

(4)

Mr. Driscoll received cash compensation of $45,000 in connection with his service on the Board and $20,000 in connection with his service as the chair of the Audit Committee.

(5)

Dr. Glover received cash compensation of $45,600 in connection with his service on the Board, $15,000 in connection with his service as chair of the Compensation Committee, $10,000 in connection with his service on the Audit Committee and $583 in connection with his service on the Strategic Committee.

(6)

Dr. Reynolds received cash compensation of $45,600 in connection with his service on the Board, $7,500 in connection with his service on the Compensation Committee, $10,000 in connection with his service as chair of the Nominating and Governance Committee and $583 in connection with his service on the Strategic Committee.

(7)

Dr. Gold received cash compensation of $15,200 in connection with his service on the Board. Mr. Gold resigned from the Board effective October 31, 2023.

(8)

Ms. Howson received cash compensation of $15,200 in connection with her service on the board of directors, $2,500 in connection with her service on the Compensation Committee and $1,667 in connection with her service on the Nominating and Governance committee. Ms. Howson resigned from the board effective October 31, 2023.

(9)

Mr. Kango received cash compensation of $15,200 in connection with his service on the board of directors, $2,500 in connection with his service on the Compensation Committee and $1,667 in connection with his service on the Nominating and Governance committee. Mr. Kango resigned from the board effective October 31, 2023.

(10)

Mr. Datoo received cash compensation of $30,400 in connection with his service on the board of directors and $3,333 in connection with his service on the Nominating and Governance committee, both of which commenced October 31, 2023. Mr. Datoo also received $34,327 as the cash equivalent of the vested grant date fair value of options granted in accordance with FASB ASC Topic 718.

(11)

Mr. Flynn received cash compensation of $30,400 in connection with his service on the board of directors and $6,666 in connection with his service on the Audit Committee, both of which commenced October 31, 2023.

(12)

Mr. Wood received cash compensation of $30,400 in connection with his service on the board of directors and $5,000 in connection with his service on the Compensation Committee, both of which commenced October 31, 2023.

Indemnification Agreements

We have entered into an indemnification agreement with each of our directors and executive officers. Subject to certain exceptions, the indemnification agreements provide that an indemnitee will be indemnified for all expenses incurred or paid by the indemnitee in connection with a proceeding to which the indemnitee was or is a party, or is threatened to be made a party, by reason of the indemnitee’s status with or service to us or to another entity at our request. In connection with proceedings other than those by or in the right of our company and to which the indemnitee was or is a party, or is threatened to be made a party, by reason of the indemnitee’s status with or service to us or to another entity at our request, the indemnification agreements provide that an indemnitee will also be indemnified for all liabilities incurred or paid by the indemnitee. The indemnification agreements also provide for advancement of expenses incurred by an indemnitee in connection with an indemnifiable claim, subject to reimbursement in certain circumstances.

The rights of each indemnitee are in addition to any other rights provided for under our amended and restated certificate of incorporation, and our amended and restated by-laws, as may be amended from time to time, and under Delaware law.