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Exhibit 99.(a)(1)(G)
Proposed Stock Option Exchange Plan
? Purpose
? To continue to provide incentives to employees who are remaining at Isis with high exercise price options
? To enhance employee retention through more attractive options and extended vesting
1
Proposed Stock Option Exchange Plan
Plan: Allow existing employees to exchange outstanding options for new options as follows: Option Exercise Price
Exchange Ratio (new for old) Greater than or equal to $5 but less than $10 1:1.5 Greater than or equal to $10 but less than $15 1:2 Greater than or equal to $15 but less than $20 1:2.5 Greater than or equal to $20 1:3
2
Proposed Stock Option Exchange Plan ? New option will have following characteristics
? Approximately a 5-year term (expire December 31, 2008)
? New vesting over 3 years (33.34% vest on January 1, 2004, then 2.78% vest monthly thereafter for 2 years)
? Vesting accelerates in an acquisition
? Exercise price is the greater of:
? $5.00; or
? The Fair Market Value on the last day of the offering
? Available for all options granted prior to January 5, 2002
? New options will be non-qualified stock options not ISOs
? Board of Director members are not eligible to participate
3
Proposed Stock Option Exchange Plan
Effects of Option Exchange ? Old Option
? 3,000 shares
? $7 exercise price
? Fully vested
? 6-year term remaining ? New Option
? 2,000 shares
? $5.00 exercise price
? New 3-year vesting
? 5-year term remaining
Isis stock price
12/31/2006
Value old option
Value new option
$ 8 $ 3,000 $ 6, ...
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