This excerpt taken from the GMCR DEF 14A filed Jan 28, 2008.
Reasons For The Amendment
The Board and the Compensation and Organizational Development Committee believe there is an insufficient number of shares remaining for awards under the 2006 Plan to accomplish the compensation objectives of the Company. As further discussed under the heading Compensation Discussion and Analysis included elsewhere in this proxy statement, our compensation program relies significantly on equity incentives to attract, retain and motivate key employees and other personnel essential to our long-term growth and future success. The Board and the Compensation and Organization Development Committee believe that equity incentives are necessary to remain competitive in the marketplace for key employees and provide an important link between compensation and increases in shareholder value. The proposed share increase will assure that a sufficient reserve of common stock remains available under the 2006 Plan to allow us to continue to provide equity incentives to our key employees in a manner consistent with our compensation program and objectives. If the proposed amendment to the 2006 Plan is not approved, the Company may consider utilizing SARs or cash bonuses to remain competitive in the market for key employees and maintain its compensation objectives.
The Board and the Compensation and Organization Development Committee also believe that the other modifications to the plan discussed in the bullet points above are consistent with the interests of our stockholders and reflect best practices in corporate governance.
On January 25, 2008, the Board approved the amendment of the 2006 Plan that is the subject of this proposal, subject to the approval of the Companys stockholders. The affirmative vote of a majority of our outstanding voting shares present or represented and entitled to vote at the 2008 Annual Meeting is required for approval of the amendment to the 2006 Plan. Should such stockholder approval not be obtained, then the proposed 700,000 share increase to the share reserve under the 2006 Plan will not be implemented. If the proposed amendment is not approved, the Board will still, however, consider making the other modifications to the 2006 Plan set forth in this proposal, as these modifications do not require shareholder approval.
The following is a brief description of the material features of the 2006 Plan, as amended by this proposal. This description is qualified in its entirety by reference to the full text of the 2006 Plan, as amended, a copy of which is attached to this proxy statement as Appendix C.