Company: INKT
Filing Date: 2025-04-30
Form Type: DEF 14A
Source: 0000950170-25-061041
Chunk: 39

Company: MiNK Therapeutics, Inc.
Filing Date: 2025-04-30
Form: DEF 14A
Chunk 39
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 This impact on total compensation negatively affects our ability to retain and motivate our employees and consultants, whom we rely on to achieve our business plans and strategic objectives. Similarly, this impact on compensation negatively impacts our ability to retain and appropriately compensate our non-employee directors.

We believe that equity compensation has been, and will continue to be, a critical component of our compensation package because it (i) contributes to a culture of ownership among our employees and other service providers, (ii) aligns our employees’ interests with the interests of our other stockholders and (iii) preserves our cash resources. It has been our practice to grant equity awards to substantially all of our full-time employees upon hire and on an annual basis. In 2024, our Board also determined to pay our employees, including our executive officers, their annual incentive bonuses for 2023 in the form of time-based options. Certain of our non-employee directors also take a portion of their fees in restricted stock units. The significant decline in the price of our common stock has a meaningful negative impact on the total compensation earned by our key talent, which we believe to be a considerable challenge to our talent retention. The labor market in the pharmaceutical industry is highly competitive and our competitors could offer equity incentives that are more attractive, which will impact our ability to retain talent. An effective and competitive equity incentive program is critical to retaining these employees and consultants and is thus critical to our success.

Under applicable accounting rules, we will recognize a total of approximately $11 million in non-cash compensation expense related to these Eligible Options, $8.7 million of which was previously expensed as of December 31, 2024 and $2.3 million 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 with performance vesting conditions 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