Company: INKT
Filing Date: 2025-04-18
Form Type: PRE 14A
Source: 0000950170-25-055881
Chunk: 39

Company: MiNK Therapeutics, Inc.
Filing Date: 2025-04-18
Form: PRE 14A
Chunk 39
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 and consultants and is thus critical to our success.

Under applicable accounting rules, we will recognize a total of approximately $[ ] in non-cash compensation expense related to these Eligible Options, $[ ] of which was previously expensed as of December 31, 2024 and $[ ] of which we continue to be obligated to expense, even if these stock options are never exercised because they remain underwater (excluding performance-based stock options deemed not probable of achievement as of December 31, 2024). We believe the Option Exchange will allow us to recapture retentive and incentive value from the compensation expense that we record in our financial statements with respect to Eligible Options that are exchanged.

Our Compensation Committee evaluated several alternatives for remaining competitive within our industry and identified a stock option exchange program as one such potential alternative. As part of this evaluation, our Compensation Committee identified the likely participants in an exchange program and analyzed the value of the equity awards to be exchanged, the general parameters of an exchange program, and the potential impact of an exchange program on our current hiring and retention goals. Our Compensation Committee determined that the Option Exchange was the most attractive alternative for the reasons set forth below.

The Option Exchange Helps to Restore Retention and Motivation Incentives. The stock options issued in the Option Exchange will replace underwater stock options. Once vested, these replacement stock options may be settled for shares of common stock under the 2021 Plan. This could provide an economic benefit to participants, unlike the Eligible Options, which are substantially underwater and not currently able to provide an economic benefit to participants, even if they are vested.

The Option Exchange Will Allow us to Obtain Value for Previous Compensation Expense. Our underwater stock options have exercise prices that are equal to the fair market value of our common stock at the time of grant. Under applicable accounting rules, we are required to continue to recognize compensation expense related to these options prior to vesting, even if they are never exercised. We believe that it is an inefficient use of corporate resources to recognize compensation expense on awards that are not valued by our employees. Replacing underwater options that result in compensation accounting expense but have little or no retention or incentive value with new stock options that will provide both enhanced retention and incentive value is a more efficient and effective compensation strategy.

Alternatives Considered

Our Compensation Committee considered alternatives to the Option Exchange, including issuing new equity awards to employees, exchanging underwater options for full value awards (such as restricted stock units), or increasing cash compensation. Our Compensation Committee determined that the Option Exchange