Summary of Compensation Practices
Belowwe summarize some of our compensation practices, both the practices we implement because we
believe they are consistent with our vision and building long-term stockholder value (see ‘‘What We Do’’ below),
and those we choose not to implement as we believe they are counter to our vision and building long-term
stockholder value (see ‘‘What We Don’t Do’’ below):
WhatWe Do
WhatWe Don’t Do
Demandmore of every employee: more
commitment, more knowledge, more intensity,
more innovation, more productivity
Do not guarantee a cash bonus –
cash bonuses can, and have been,
zero
Reward productivity and performance
Do not provide perquisites for any
employees
Recognize the value of long-term employees and
low turnover
Do not provide ‘‘gross-up’’
payments, other than for relocation
Use a balancedmix of fixed and variable cash
incentives and long-term equity incentives
Do not allow pledging, shorting or
hedging against our stock
Evaluate compensation compared to the 50
th
percentile of our peer group
Do not reprice or ‘‘cash-out’’ stock
options without stockholder
approval
Design our compensation philosophy and
objectives tomitigate unnecessary or imprudent
business risk taking
Set explicit and demanding objectives at the
beginning of each year fromwhich we measure
performance for the year
Place amaximum limit on PerformanceMBOs
Set a strict budget for equity awards and salary
increases
Set the size of equity awards based on individual
and company performance
Require minimumvesting periods for equity
awards
Maintain equity holding periods that require our
named executive officers and non-employee Board
members to hold shares received from their RSUs
until theymeet certain ownership thresholds or
no longer serve the company
Maintain equity holding periods that require our
employees to hold ESPP shares for aminimumof
sixmonths
Require our executive officers andVPs to trade
Isis’ stock through Rule 10b5-1 trading plans
Use a ‘‘double trigger’’ for cash payments for
change of control
Use an executive ‘‘claw-back’’ policy
Use an independent compensation consultant
engaged by the Compensation Committee
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