This excerpt taken from the ISIS DEF 14A filed Apr 18, 2008.
AMENDMENT OF THE 1989 STOCK OPTION PLAN TO INCREASE SHARES
In June 1989, our Board of Directors adopted, and our stockholders subsequently approved, our 1989 Stock Option Plan (the 1989 Plan).
Below is a high-level summary of the terms of the 1989 Plan. Please be sure to read the more detailed description of the 1989 Plan contained in this Proposal 3. The 1989 Plan, among other things:
· Has a term ending on January 31, 2014;
· Prohibits the repricing of any option outstanding under the 1989 Plan unless approved by our stockholders;
· Is limited to the grant of options and does not authorize stock bonuses or restricted stock awards;
· Limits the term of each newly granted option to 7 years;
· Requires that each newly granted option not become fully vested until a date at least two years after the date of grant, except in the case of certain corporate events;
· Requires all options outstanding under the 1989 Plan to have an exercise price of not less than 100% of the fair market value of our common stock on the date of grant;
· Is administered by our Compensation Committee, which is composed entirely of independent Directors; and
· Requires that the exercise price for options outstanding under the 1989 Plan can only be paid in cash.
Our management, Board and Compensation Committee believe that stock options are a key aspect of our ability to attract and retain qualified personnel in the face of intense competition for experienced scientists and other personnel among many pharmaceutical and health care companies. The Board, upon the recommendation of the Compensation Committee, has approved an increase in the aggregate number of shares of common stock authorized for issuance under the 1989 Plan by 3,500,000 shares to an aggregate of 16,700,000 shares, in order to ensure that for a period of at least two years, based on business plans, we are able to continue to grant stock options to employees and consultants at appropriate levels as determined by the Compensation Committee. If the stockholders do not approve Proposal 3, and as a consequence, we are unable to continue to grant options at competitive levels, we believe that it will negatively affect our ability to meet our needs for highly qualified personnel and our ability to manage future growth. Without these additional shares, management expects that the current shares available for grant under the 1989 Plan will not be sufficient to maintain our option grant practices for new employees or for promotions or merit awards for current employees after January 2009.
Subject to stockholder approval of this Proposal 3, a total of 16,700,000 shares are reserved for issuance under the 1989 Plan. As of March 31, 2008, a total of 6,649,011 options were granted and outstanding, 3,263,727 of which were vested and exercisable; and options to purchase an aggregate of 6,508,306 shares had been exercised under the 1989 Plan. If our stockholders do not approve this Proposal 3, as of March 31, 2008 there would only be 42,683 shares available for future grant under the 1989 Plan.