Company: AGIO
Filing Date: 2025-04-25
Form Type: DEF 14A
Source: 0001193125-25-096719
Chunk: 104

Company: AGIOS PHARMACEUTICALS, INC.
Filing Date: 2025-04-25
Form: DEF 14A
Chunk 104
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 stockholders on June 13, 2023. When the Current Plan was adopted, we expected that the share pool under the Current Plan would allow us to continue to grant equity awards (other than to certain newly hired executives who will receive grants pursuant to the inducement grant exception under Nasdaq Listing Rule 5635(c)(4) to the extent eligible) at our historic rates for approximately two years. Consistent with that expectation, the remaining share pool under the Current Plan is now insufficient to meet our future equity compensation needs. The proposed 2023 Plan Amendment therefore increases the share pool under the Current Plan by 2,500,000 shares of common stock and increases the number of shares that may be issued as incentive stock options by the same number. No other changes are being made to the Current Plan. If approved, the new shares reserved under the Amended Plan would represent approximately 4.3% of our 57,886,781 outstanding shares as of March 31, 2025. Our board of directors believes the proposed dilution to stockholders as a result of the amendment is judicious and sustainable and, importantly, critical to meet our business goals.

In developing our share request for the 2023 Plan Amendment and analyzing the impact of utilizing equity as a means of compensation on our stockholders, we considered both our “overhang” and our “burn rate.”

Overhang is a measure of potential dilution, which we define as the sum of (i) the total number of shares underlying all equity awards outstanding and (ii) the total number of shares available for future award grants, divided by the number of shares of common stock outstanding. As of March 31, 2025, there were 9,109,743 shares underlying all equity awards outstanding (assuming maximum performance under PSUs), 1,215,876 shares available under the Current Plan for future awards, and 57,886,781 shares of common stock outstanding. Accordingly, our overhang at March 31, 2025 was 17.8%. If the 2,500,000 shares proposed to be authorized for grant under the 2023 Plan Amendment are included in the calculation, our overhang on March 31, 2025 would have been 22.2%.

Burn rate provides a measure of the potential dilutive impact of our equity award program, which we calculate by dividing the number of shares subject to equity awards granted during the year by the basic weighted

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