Repricing

RiskMetrics Group (RMG) as well as many other institutional shareholders do not support plans that expressly permit “repricing” of stock options or stock appreciation rights without shareholder approval. RMG  also considers the ability to cash-out “underwater” stock options or stock appreciation rights without shareholder approval to be undesirable. 

If a company has a history of repricing stock options without shareholder approval, RMG will recommend AGAINST an equity plan proposal unless the plan specifically prohibits repricing or the company’s listing standards prohibit the company from repricing stock options without shareholder approval.

Most equity compensation plans contain a provision today which specifically prohibits the repricing of stock options or stock appreciation rights without shareholder approval. But note that unless a plan expressly

One example is the  2009 Long-Term Incentive Plan submitted to shareholders by The Stanley Works as part of its 2009 proxy statement:

http://www.sec.gov/Archives/edgar/data/93556/000119312509059356/ddef14a.htm