📄 What This Document Is 📜

This filing is an "Additional Materials" supplement (DEFA14A) to MacroGenics, Inc.'s formal Proxy Statement. Think of a Proxy Statement as the official document guiding shareholders on how to vote at the annual meeting. This supplement exists because the company needed to correct a clerical error and, more importantly, request a major vote on a new incentive plan.

👉 Why should readers care? The core purpose of this document is to ask stockholders for approval to significantly increase the number of shares the company can issue to employees and key advisors, a mechanism that is central to the company's long-term ability to operate.

🏢 What The Company Does 🧪

MacroGenics is a clinical-stage biopharmaceutical company. In simple terms, its business is discovering, developing, manufacturing, and commercializing innovative therapies. Specifically, they focus on antibody-based therapeutics designed for the treatment of cancer.

👉 Why it matters: Biopharma development is a complex, multi-year process. The company's success relies heavily on highly specialized science, which is why their compensation structure is so focused on stock grants.

📣 The Main Ask: Amending the Equity Plan 📈

The most critical action requested here is the approval of the Amended 2023 Equity Incentive Plan. This is the vehicle through which the company grants its compensation to key personnel.

• The History: The initial 2023 Plan was approved by stockholders on May 31, 2023. The Board adopted a further amendment on February 25, 2026, intending to increase the total share count.
• The Amendment: The company is requesting approval for this specific amendment to increase the total pool of available shares. They are not asking for any other changes to the plan.
• Voting Timeline: Shareholders have until the Annual Meeting of Stockholders, which is scheduled to be held virtually on May 19, 2026, at 9:00 a.m. Eastern Time.

💰 The Share Mechanics 📊

To understand the gravity of the request, we need to look at the current share figures. The company is asking for a boost to its available "share reserve"—the pool of stock set aside for future awards.

• Shares Currently Available: As of March 27, 2026, there were already 2,494,325 shares of common stock available for grant under the existing 2023 Plan.
• The Proposed Increase: The Board plans to add 1,250,000 new shares through the Amended 2023 Plan.
• Total Impact: If approved, the total number of shares available for grant after the Annual Meeting would increase to approximately 3,744,325 shares.

👉 Why it matters: This shows the company is making a substantial, defined request for capital (in the form of shares) to support its future operations.

🧠 Why They Need the Extra Shares 💪

The company frames this request as a strategic necessity, not just a financial choice. They argue that stock incentives are vital for survival and growth in their industry.

• Talent Attraction & Retention: The primary driver is the need to attract, motivate, and retain qualified personnel (employees, non-employee directors, and consultants). The Board states that without this support, they might not achieve their development and commercialization goals.
• Industry Competition: They emphasize that the market for scientific and technical talent is highly competitive, making incentives essential.
• Compensation Philosophy: MacroGenics relies heavily on equity awards (like stock options and RSUs) because they believe this approach "strongly aligns the interests of our employees with those of our stockholders."
• Avoiding Cash Spending: The company specifically noted that increasing cash compensation would negatively impact their financial resources, which are needed to advance their product candidates.

👨‍💼 Key Personnel & Compensation History 🧑‍🔬

Executive compensation is the largest user of this incentive plan. The filing details several recent and pending awards, showing who is being incentivized.

• CEO Appointment: Mr. Risser was appointed President and Chief Executive Officer (CEO) effective on August 13, 2025. In connection with this appointment, he was granted a stock option award to purchase 550,000 shares at an exercise price equal to the stock's closing per-share trading price on that date.
• Largest Award Recipient: As of December 31, 2025, the total number of shares granted to all current employees (excluding executives) was 2,478,800.
• Total Board Grants: Grants to all current non-employee directors (10 persons) totaled 1,160,373 shares.

📜 The Rules of the Game: Award Types 📄

The filing takes time to explain the technical rules governing how stock awards work. Understanding these definitions is crucial because they determine the tax consequences for the recipients.

• Incentive Stock Options (ISOs): These options generally avoid ordinary income tax upon grant or exercise. To qualify for tax benefits, the holder must meet a "required holding period" (more than two years from the grant date and more than one year from the exercise date).
• Restricted Stock Units (RSUs): These units grant actual shares upon vesting. The recipient generally recognizes ordinary income equal to the market value of the shares upon delivery.
• Corporate Changes: The plan outlines how awards will be handled during major corporate events like a merger or sale of assets. In a transaction, an award may be assumed or substituted by the acquiring company.
• Change in Control: The plan specifies that a "change in control" is generally defined as any person or company acquiring more than 50% of the combined voting power of the outstanding stock.

⚠️ Managing the Risk & Oversight ⚖️

The company addresses the potential risk of dilution—the effect that issuing many shares has on existing stockholders' ownership percentage. They commit to managing this carefully.

• Overhang Monitoring: The company is committed to "effectively monitoring our equity compensation share reserve, including our 'burn rate,' to ensure that we maximize stockholders’ value."
• Overhang Metric: The filing includes a table with metrics that demonstrate how the company tracks its share dilution risk (though the actual data tables are omitted from the source text provided).
• General Commitment: The company emphasizes that they are only requesting the necessary shares to cover their estimated "near-term equity compensation needs."

❓ What's Next for the Company 🗺️

While the document is primarily about the vote, it does provide context on ongoing planning and future strategy.

• Ongoing Strategy: The Plan remains in place to support the continued research and development of the company’s antibody-based therapeutics.
• Financial Focus: The company's strategy is focused on using a combination of equity and cash compensation, which they believe is the best mix to meet expected industry recruiting standards.

💡 Why This Matters (The Investor Takeaway) 🚀

When you review a proxy supplement like this, the most important thing to understand is that the company is funding its talent pool with stock shares.

• Decoding the Ask: The Board is attempting to stabilize and grow the pool of fungible assets (shares) that are necessary to pay key people in a high-cost industry (biopharma).
• The Trade-off: Stock compensation is great for aligning interests (meaning employees succeed when the stock price goes up), but it inevitably dilutes existing shareholders. The high volume of shares requested reflects the high cost and importance of specialized talent in the oncology drug space.

📞 Key Meeting Information 📅

If you plan to vote or learn more, here is the critical information regarding the Annual Meeting.

• Event: 2026 Annual Meeting of Stockholders.
• Date/Time: May 19, 2026, at 9:00 a.m. Eastern Time.
• Format: The meeting will be held virtually.
• Voting: Shareholders who have already voted through a broker do not need to take action to change their vote.

🧠 The Analogy 🏗️

Think of the company's equity plan like a premium team roster for an elite professional sports franchise. The coach (management) needs to keep offering lucrative contracts (equity awards) to the best players (scientists and doctors) to keep them motivated and prevent them from joining a rival team. The "extra shares" the company is requesting are simply buying more tickets to that roster. It's a massive investment in human talent that the company believes is more critical—and cheaper—than paying pure cash salaries.

🧩 Final Takeaway 🎯

The company is proposing a significant increase in its available share pool (1.25 million shares) to maintain its competitive edge in the specialized, highly competitive field of cancer drug development. Approving this vote is essential for MacroGenics to continue paying and retaining the highly skilled talent needed to advance its drug pipeline.