Exhibit 10

 

ISOLAGEN, INC.

 

2005 EQUITY INCENTIVE PLAN

 

Adopted by the Isolagen, Inc.

Board of Directors on April 26, 2005

 

Approved by the Shareholders

On June 23, 2005

 

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ISOLAGEN, INC.

2005 EQUITY INCENTIVE PLAN

 

TABLE OF CONTENTS

 

1.

Purpose

 

2.

Definitions

 

3.

Administration

 

4.

Grants

 

5.

Shares Subject to the Plan

 

6.

Eligibility for Participation

 

7.

Options

 

8.

Stock Units

 

9.

Stock Awards

 

10.

Stock Appreciation Rights and Other Stock-Based Awards

 

11.

Qualified Performance-Based Compensation

 

12.

Deferrals

 

13.

Withholding of Taxes

 

14.

Transferability of Grants

 

15.

Consequences of a Change of Control

 

16.

Requirements for Issuance of Shares

 

17.

Amendment and Termination of the Plan

 

18.

Miscellaneous

 

 

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ISOLAGEN, INC.

 

2005 EQUITY INCENTIVE PLAN

 

1.                                      Purpose and Objectives

 

The Isolagen, Inc. 2005 Equity Incentive Plan (the “Plan”) is designed to align
the interests of (i) designated employees of Isolagen, Inc. (the “Company”) and
its subsidiaries, (ii) non-employee members of the board of directors of the
Company, and (iii) consultants and key advisors of the Company and its
subsidiaries with the interests of the Company’s stockholders and to provide
incentives for such persons to exert maximum efforts for the success of the
Company. By extending the opportunity to receive grants of stock options, stock
units, stock awards, stock appreciation rights and other stock-based awards, the
Company believes that the Plan will encourage the participants to contribute
materially to the growth of the Company, thereby benefiting the Company’s
shareholders, and will align the economic interests of the participants with
those of the shareholders. The Plan may furthermore be expected to benefit the
Company and its stockholders by making it possible for the Company to attract
and retain the best available talent. The Plan shall be effective as of
April 26, 2005, subject to approval by the shareholders of the Company.

 

2.                                      Definitions

 

Whenever used in this Plan, the following terms will have the respective
meanings set forth below:

 

(a)                                  “Board” means the Company’s Board of
Directors.

 

(b)                                 “Cause” means, except to the extent
otherwise specified by the Committee, a finding by the Committee of a
Participant’s incompetence in the performance of duties, disloyalty, dishonesty,
theft, embezzlement, or unauthorized disclosure of customer lists, product
lines, processes or trade secrets of the Employer, individually or as an
employee, partner, associate, officer or director of any organization.

 

(c)                                  “Change of Control” shall be deemed to have
occurred if:

 

(i)                                     Any “person” (as such term is used in
sections 13(d) and 14(d) of the Exchange Act) becomes a “beneficial owner” (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company representing more than 50% of the voting power of the
then outstanding securities of the Company; provided that a Change of Control
shall not be deemed to occur as a result of a transaction in which the Company
becomes a subsidiary of another corporation and in which the shareholders of the
Company, immediately prior to the transaction, will beneficially own,
immediately after the transaction, shares entitling such shareholders to more
than 50% of all votes to which all shareholders of the parent corporation would
be entitled in the election of directors;

 

(ii)                                  The consummation of (i) a merger or
consolidation of the Company with another corporation where the shareholders of
the Company, immediately prior to the merger or consolidation, will not
beneficially own, immediately after the merger or consolidation, shares
entitling such shareholders to more than 50% of all votes to which all
shareholders of the surviving corporation would be entitled in the election of
directors, (ii) a sale or other disposition of all or substantially all of the
assets of the Company, or (iii) a liquidation or dissolution of the Company; or

 

(d)                                 “Code” means the Internal Revenue Code of
1986, as amended.

 

(e)                                  “Committee” means the Compensation
Committee of the Board or another committee appointed by the Board to administer
the Plan. Grants that are intended to be “qualified performance-based
compensation” under section 162(m) of the Code shall be made by a committee that
consists of two or more persons appointed by the Board, all of whom shall be
“outside directors” as defined under section 162(m) of the Code and related
Treasury regulations.

 

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(f)                                    “Company” means Isolagen, Inc. and any
successor corporation.

 

(g)                                 “Company Stock” means the common stock of
the Company.

 

(h)                                 “Consultant” means a consultant or advisor
who performs services for the Employer and who renders bona fide services to the
Employer, if the services are not in connection with the offer and sale of
securities in a capital-raising transaction and the Consultant does not directly
or indirectly promote or maintain a market for the Employer’s securities.

 

(i)                                     “Disability” means a Participant’s
becoming disabled within the meaning of section 22(e)(3) of the Code, within the
meaning of the Employer’s long-term disability plan applicable to the
Participant, or as otherwise determined by the Committee.

 

(j)                                     “Effective Date” of the Plan means
April 26, 2005, subject to approval of the Plan by the shareholders of the
Company.

 

(k)                                  “Employee” means an employee of the
Employer (including an officer or director who is also an employee).

 

(l)                                     “Employer” means the Company and its
subsidiaries.

 

(m)                               “Exchange Act” means the Securities Exchange
Act of 1934, as amended.

 

(n)                                 “Exercise Price” means the per share price
at which shares of Company Stock may be purchased under an Option, as designated
by the Committee.

 

(o)                                 “Fair Market Value” of Company Stock means,
unless the Committee determines otherwise with respect to a particular Grant,
(i) if the principal trading market for the Company Stock is the American Stock
Exchange or another national securities exchange, the “closing transaction”
price at which shares of Company Stock are traded on such securities exchange on
the relevant date or (if there were no trades on that date) the latest preceding
date upon which a sale was reported, (ii) if the Company Stock is not
principally traded on a national securities exchange, but is quoted on The
Nasdaq Stock Market, Inc. National Market System (“NMS”) or Small-Cap Market
(“Small-Cap”), the NASD OTC Bulletin Board (“OTCBB”) or the Pink Sheets, the
last reported “closing transaction” price of Company Stock on the relevant date,
as reported by the NMS, Small-Cap, OTCBB or Pink Sheets, or, if not so reported,
as reported in a customary financial reporting service, as the Committee
determines, or (iii) if the Company Stock is not publicly traded or, if publicly
traded, is not subject to reported closing transaction prices as set forth
above, the Fair Market Value per share shall be as determined by the Committee.
Notwithstanding the foregoing, for federal, state and local income tax purposes,
the Fair Market Value may be determined by the Committee in accordance with
uniform and non-discriminatory standards adopted by it from time to time.

 

(p)                                 “Grant” means an Option, Stock Unit, Stock
Award, SAR or Other Stock-Based Award granted under the Plan.

 

(q)                                 “Grant Agreement” means the written
instrument that sets forth the terms and conditions of a Grant, including all
amendments thereto.

 

(r)                                    “Incentive Stock Option” means an Option
that is intended to meet the requirements of an incentive stock option under
section 422 of the Code.

 

(s)                                  “Non-Employee Director” means a member of
the Board who is not an employee of the Employer.

 

(t)                                    “Nonqualified Stock Option” means an
Option that is not intended to be taxed as an incentive stock option under
section 422 of the Code.

 

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(u)                                 “Option” means an option to purchase shares
of Company Stock, as described in Section 7.

 

(v)                                 “Other Stock-Based Award” means any Grant
based on, measured by or payable in Company Stock (other than a Grant described
in Sections 7, 8 or 9 of the Plan), as described in Section 10.

 

(w)                               “Participant” means an Employee, Consultant or
Non-Employee Director designated by the Committee to participate in the Plan.

 

(x)                                   “Plan” means this Isolagen, Inc. 2005
Equity Incentive Plan, as in effect from time to time.

 

(y)                                 “SAR” means a stock appreciation right as
described in Section 10.

 

(z)                                   “Stock Award” means an award of Company
Stock as described in Section 9.

 

(aa)                            “Stock Unit” means an award of a phantom unit
representing a share of Company Stock, as described in Section 8.

 

3.                                      Administration

 

(a)                                  Committee.  The Plan shall be administered
and interpreted by the Committee. Ministerial functions may be performed by an
administrative committee comprised of Company employees appointed by the
Committee.

 

(b)                                 Committee Authority.  The Committee shall
have the sole authority to (i) determine the Participants to whom Grants shall
be made under the Plan, (ii) determine the type, size and terms and conditions
of the Grants to be made to each such Participant, (iii) determine the time when
the grants will be made and the duration of any applicable exercise or
restriction period, including the criteria for exercisability and the
acceleration of exercisability, (iv) amend the terms and conditions of any
previously issued Grant, subject to the provisions of Section 17 below, and
(v) deal with any other matters arising under the Plan.

 

(c)                                  Committee Determinations.  The Committee
shall have full power and express discretionary authority to administer and
interpret the Plan, to make factual determinations and to adopt or amend such
rules, regulations, agreements and instruments for implementing the Plan and for
the conduct of its business as it deems necessary or advisable, in its sole
discretion. The Committee’s interpretations of the Plan and all determinations
made by the Committee pursuant to the powers vested in it hereunder shall be
conclusive and binding on all persons having any interest in the Plan or in any
awards granted hereunder. All powers of the Committee shall be executed in its
sole discretion, in the best interest of the Company, not as a fiduciary, and in
keeping with the objectives of the Plan and need not be uniform as to similarly
situated Participants.

 

4.                                      Grants

 

(a)                                  Grants under the Plan may consist of
Options as described in Section 7, Stock Units as described in Section 8, Stock
Awards as described in Section 9, and SARs or Other Stock-Based Awards as
described in Section 10. All Grants shall be subject to such terms and
conditions as the Committee deems appropriate and as are specified in writing by
the Committee to the Participant in the Grant Agreement.

 

(b)                                 All Grants shall be made conditional upon
the Participant’s acknowledgement, in writing or by acceptance of the Grant,
that all decisions and determinations of the Committee shall be final and
binding on the Participant, his or her beneficiaries and any other person having
or claiming an interest under such Grant. Grants under a particular Section of
the Plan need not be uniform as among the Participants.

 

5.                                      Shares Subject to the Plan

 

(a)                                  Shares Authorized.  The aggregate number of
shares of Company Stock that may be issued under the Plan is 2,100,000 shares,
subject to adjustment as described in subsection (e) below.

 

(b)                                 Limit on Stock Awards, Stock Units, SARs and
Other Stock-Based Awards.  Within the aggregate

 

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limit described in subsection (a), the maximum number of shares of Company Stock
that may be issued under the Plan pursuant to Stock Awards, Stock Units, SARs
and Other Stock-Based Awards during the term of the Plan is 525,000 shares,
subject to adjustment as described in subsection (e) below.

 

(c)                                  Source of Shares; Share Counting.  Shares
issued under the Plan may be authorized but unissued shares of Company Stock or
reacquired shares of Company Stock, including shares purchased by the Company on
the open market for purposes of the Plan. If and to the extent Options and SARs
granted under the Plan terminate, expire, or are canceled, forfeited, exchanged
or surrendered without having been exercised, and if and to the extent that any
Stock Awards, Stock Units or Other Stock-Based Awards are forfeited or
terminated, or otherwise are not paid in full, the shares reserved for such
Grants shall again be available for purposes of the Plan.

 

(d)                                 Individual Limits.  All Grants under the
Plan shall be expressed in shares of Company Stock. The maximum number of shares
of Company Stock with respect to which all Grants may be made under the Plan to
any individual during any calendar year shall be 500,000 shares, subject to
adjustment as described in subsection (e) below. The individual limits of this
subsection (d) shall apply without regard to whether the Grants are to be paid
in Company Stock or cash. All cash payments shall equal the Fair Market Value of
the shares of Company Stock to which the cash payments relate.

 

(e)                                  Adjustments.  If there is any change in the
number or kind of shares of Company Stock outstanding (i) by reason of a stock
dividend, spinoff, recapitalization, stock split, or combination or exchange of
shares, (ii) by reason of a merger, reorganization or consolidation, (iii) by
reason of a reclassification or change in par value, or (iv) by reason of any
other extraordinary or unusual event affecting the outstanding Company Stock as
a class without the Company’s receipt of consideration, or if the value of
outstanding shares of Company Stock is substantially reduced as a result of a
spinoff or the Company’s payment of an extraordinary dividend or distribution,
the maximum number of shares of Company Stock available for issuance under the
Plan, the maximum number of shares of Company Stock for which any individual may
receive Grants in any year, the number of shares covered by outstanding Grants,
the kind of shares issued and to be issued under the Plan, and the price per
share or the applicable market value of such Grants may be appropriately
adjusted by the Committee to reflect any increase or decrease in the number of,
or change in the kind or value of, issued shares of Company Stock to preclude,
to the extent practicable, the enlargement or dilution of rights and benefits
under such Grants; provided, however, that any fractional shares resulting from
such adjustment shall be eliminated. Any adjustments determined by the Committee
shall be final, binding and conclusive.

 

6.                                      Eligibility for Participation

 

(a)                                  Eligible Persons.  All Employees,
Consultants and Non-Employee Directors shall be eligible to participate in the
Plan.

 

(b)                                 Selection of Participants.  The Committee
shall select the Employees, Consultants and Non-Employee Directors to receive
Grants and shall determine the number of shares of Company Stock subject to each
Grant.

 

7.                                      Options

 

(a)                                  General Requirements.  The Committee may
grant Options to an Employee, Consultant or Non-Employee Director upon such
terms and conditions as the Committee deems appropriate under this Section 7.
The Committee shall determine the number of shares of Company Stock that will be
subject to each Grant of Options to Employees, Consultants and Non-Employee
Directors.

 

(b)                                 Type of Option, Price and Term

 

(i)                                     The Committee may grant Incentive Stock
Options or Nonqualified Stock Options or any combination of the two, all in
accordance with the terms and conditions set forth herein. Incentive Stock
Options may be granted only to Employees of the Company or its parents or
subsidiaries, as defined in section 424 of the Code. Nonqualified Stock Options
may be granted to Employees, Consultants or Non-Employee Directors.

 

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(ii)                                  The Exercise Price of Company Stock
subject to an Option shall be determined by the Committee; provided, however,
that the Exercise Price for an Option (including Incentive Stock Options or
Nonqualified Stock Options) will be equal to, or greater than, the Fair Market
Value of a share of Company Stock on the date the Option is granted and further
provided that an Incentive Stock Option may not be granted to an Employee who,
at the time of grant, owns stock possessing more than 10% of the total combined
voting power of all classes of stock of the Company or any parent or subsidiary,
as defined in section 424 of the Code, unless the Exercise Price per share is
not less than 110% of the Fair Market Value of the Company Stock on the date of
grant

 

(iii)                               The Committee shall determine the term of
each Option, which shall not exceed ten years from the date of grant. However,
an Incentive Stock Option that is granted to an Employee who, at the time of
grant, owns stock possessing more than 10% of the total combined voting power of
all classes of stock of the Company or any parent or subsidiary, as defined in
section 424 of the Code, may not have a term that exceeds five years from the
date of grant.

 

(c)                                  Exercisability of Options.

 

(i)                                     Options shall become exercisable in
accordance with such terms and conditions as may be determined by the Committee
and specified in the Grant Agreement. The Committee may accelerate the
exercisability of any or all outstanding Options at any time for any reason.

 

(ii)                                  The Committee may provide in a Grant
Instrument that the Participant may elect to exercise part or all of an Option
before it otherwise has become exercisable. Any shares so purchased shall be
restricted shares and shall be subject to a repurchase right in favor of the
Company during a specified restriction period, with the repurchase price equal
to the lesser of (A) the Exercise Price or (B) the Fair Market Value of such
shares at the time of repurchase, or such other restrictions as the Committee
deems appropriate.

 

(iii)                               Options granted to persons who are
non-exempt employees under the Fair Labor Standards Act of 1938, as amended, may
not be exercisable for at least six months after the date of grant (except that
such Options may become exercisable, as determined by the Committee, upon the
Participant’s death, Disability or retirement, or upon a Change of Control or
other circumstances permitted by applicable regulations).

 

(d)                                 Termination of Employment or Service.  Upon
termination of employment or the services of a Participant, an Option may only
be exercised as follows:

 

(i)                                     In the event that a Participant ceases
to be employed by, or provide service to, the Employer for any reason other than
Disability, death, or termination for Cause, any Option which is otherwise
exercisable by the Participant shall terminate unless exercised within three
months after the date on which the Participant ceases to be employed by, or
provide service to, the Employer (or within such other period of time as may be
specified by the Committee), but in any event no later than the date of
expiration of the Option term. Except as otherwise provided by the Committee,
any of the Participant’s Options that are not otherwise exercisable as of the
date on which the Participant ceases to be employed by, or provide service to,
the Employer shall terminate as of such date.

 

(ii)                                  In the event the Participant ceases to be
employed by, or provide service to, the Employer on account of a termination for
Cause by the Employer, any Option held by the Participant shall terminate as of
the date the Participant ceases to be employed by, or provide service to, the
Employer. In addition, notwithstanding any other provisions of this Section 7,
if the Committee determines that the Participant has engaged in conduct that
constitutes Cause at any time while the Participant is employed by, or providing
service to, the Employer or after the Participant’s termination of employment or
service, any Option held by the Participant shall immediately terminate and the
Participant shall automatically forfeit all shares underlying any exercised
portion of an Option for which the Company has not yet delivered the share
certificates, upon refund by the Company of the Exercise Price paid by the
Participant for such shares. Upon any exercise of an Option, the Company may
withhold delivery of share certificates pending resolution of an inquiry that
could lead to a finding resulting in a forfeiture.

 

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(iii)                               In the event the Participant ceases to be
employed by, or provide service to, the Employer on account of the Participant’s
Disability, any Option which is otherwise exercisable by the Participant shall
terminate unless exercised within one year after the date on which the
Participant ceases to be employed by, or provide service to, the Employer (or
within such other period of time as may be specified by the Committee), but in
any event no later than the date of expiration of the Option term. Except as
otherwise provided by the Committee, any of the Participant’s Options which are
not otherwise exercisable as of the date on which the Participant ceases to be
employed by, or provide service to, the Employer shall terminate as of such
date.

 

(iv)                              If the Participant dies while employed by, or
providing service to, the Employer or while an Option remains outstanding under
Section 7(d)(i) or 7(d)(iii) above (or within such other period of time as may
be specified by the Committee), any Option that is otherwise exercisable by the
Participant shall terminate unless exercised within one year after the date on
which the Participant ceases to be employed by, or provide service to, the
Employer (or within such other period of time as may be specified by the
Committee), but in any event no later than the date of expiration of the Option
term. Except as otherwise provided by the Committee, any of the Participant’s
Options that are not otherwise exercisable as of the date on which the
Participant ceases to be employed by, or provide service to, the Employer shall
terminate as of such date.

 

(e)                                  Exercise of Options.  A Participant may
exercise an Option that has become exercisable, in whole or in part, by
delivering a notice of exercise to the Company. The Participant shall pay the
Exercise Price for the Option (i) in cash, (ii) if permitted by the Committee,
by delivering shares of Company Stock owned by the Participant and having a Fair
Market Value on the date of exercise equal to the Exercise Price or by
attestation to ownership of shares of Company Stock having an aggregate Fair
Market Value on the date of exercise equal to the Exercise Price, (iii) by
payment through a broker in accordance with procedures permitted by Regulation T
of the Federal Reserve Board, or (iv) by such other method as the Committee may
approve. Shares of Company Stock used to exercise an Option shall have been held
by the Participant for the requisite period of time to avoid adverse accounting
consequences to the Company with respect to the Option. Payment for the shares
pursuant to the Option, and any required withholding taxes, must be received by
the time specified by the Committee depending on the type of payment being made,
but in all cases prior to the issuance of the Company Stock.

 

(f)                                    Limits on Incentive Stock Options.  Each
Incentive Stock Option shall provide that, if the aggregate Fair Market Value of
the stock on the date of the grant with respect to which Incentive Stock Options
are exercisable for the first time by a Participant during any calendar year,
under the Plan or any other stock option plan of the Company or a parent or
subsidiary, as defined in section 424 of the Code, exceeds $100,000, then the
Option, as to the excess, shall be treated as a Nonqualified Stock Option. An
Incentive Stock Option shall not be granted to any person who is not an Employee
of the Company or a parent or subsidiary, as defined in section 424 of the Code.

 

8.                                      Stock Units

 

(a)                                  General Requirements.  The Committee may
grant Stock Units to an Employee, Consultant or Non-Employee Director, upon such
terms and conditions as the Committee deems appropriate under this Section 8.
Each Stock Unit shall represent the right of the Participant to receive a share
of Company Stock or an amount based on the value of a share of Company Stock.
All Stock Units shall be credited to bookkeeping accounts on the Company’s
records for purposes of the Plan.

 

(b)                                 Terms of Stock Units.  The Committee may
grant Stock Units that are payable on terms and conditions determined by the
Committee, which may include payment based on achievement of performance goals.
Stock Units may be paid at the end of a specified vesting or performance period,
or payment may be deferred to a date authorized by the Committee. The Committee
shall determine the number of Stock Units to be granted and the requirements
applicable to such Stock Units.

 

(c)                                  Payment With Respect to Stock Units. 
Payment with respect to Stock Units shall be made in cash, in Company Stock, or
in a combination of the two, as determined by the Committee. The Grant Agreement
shall specify the maximum number of shares that can be issued under the Stock
Units.

 

(d)                                 Requirement of Employment or Service.  The
Committee shall determine in the Grant Agreement

 

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under what circumstances a Participant may retain Stock Units after termination
of the Participant’s employment or service, and the circumstances under which
Stock Units may be forfeited.

 

9.                                      Stock Awards

 

(a)                                  General Requirements.  The Committee may
issue shares of Company Stock to an Employee, Consultant or Non-Employee
Director under a Stock Award, upon such terms and conditions as the Committee
deems appropriate under this Section 9. Shares of Company Stock issued pursuant
to Stock Awards may be issued for cash consideration or for no cash
consideration, and subject to restrictions or no restrictions, as determined by
the Committee. The Committee may establish conditions under which restrictions
on Stock Awards shall lapse over a period of time or according to such other
criteria as the Committee deems appropriate, including restrictions based upon
the achievement of specific performance goals. The Committee shall determine the
number of shares of Company Stock to be issued pursuant to a Stock Award.

 

(b)                                 Requirement of Employment or Service.  The
Committee shall determine in the Grant Agreement under what circumstances a
Participant may retain Stock Awards after termination of the Participant’s
employment or service, and the circumstances under which Stock Awards may be
forfeited.

 

(c)                                  Restrictions on Transfer.  While Stock
Awards are subject to restrictions, a Participant may not sell, assign,
transfer, pledge or otherwise dispose of the shares of a Stock Award except upon
death as described in Section 14(a). Each certificate for a share of a Stock
Award shall contain a legend giving appropriate notice of the restrictions in
the Grant. The Participant shall be entitled to have the legend removed when all
restrictions on such shares have lapsed. The Company may retain possession of
any certificates for Stock Awards until all restrictions on such shares have
lapsed.

 

(d)                                 Right to Vote and to Receive Dividends.  The
Committee shall determine to what extent, and under what conditions, the
Participant shall have the right to vote shares of Stock Awards and to receive
any dividends or other distributions paid on such shares during the restriction
period.

 

10.                               Stock Appreciation Rights and Other
Stock-Based Awards

 

(a)                                  The Committee may grant SARs to an
Employee, Non-Employee Director or Consultant separately or in tandem with an
Option. The following provisions are applicable to SARs:

 

(i)                                     Base Amount. The Committee shall
establish the base amount of the SAR at the time the SAR is granted. The base
amount of each SAR shall be equal to the per share Exercise Price of the related
Option or, if there is no related Option, an amount that is at least equal to
the Fair Market Value of a share of Company Stock as of the date of Grant of the
SAR.

 

(ii)                                  Tandem SARs. The Committee may grant
tandem SARs either at the time the Option is granted or at any time thereafter
while the Option remains outstanding; provided, however, that, in the case of an
Incentive Stock Option, SARs may be granted only at the date of the grant of the
Incentive Stock Option. In the case of tandem SARs, the number of SARs granted
to a Participant that shall be exercisable during a specified period shall not
exceed the number of shares of Company Stock that the Participant may purchase
upon the exercise of the related Option during such period. Upon the exercise of
an Option, the SARs relating to the Company Stock covered by such Option shall
terminate. Upon the exercise of SARs, the related Option shall terminate to the
extent of an equal number of shares of Company Stock.

 

(iii)                               Exercisability. An SAR shall be exercisable
during the period specified by the Committee in the Grant Agreement and shall be
subject to such vesting and other restrictions as may be specified in the Grant
Agreement. The Committee may grant SARs that are subject to achievement of
performance goals or other conditions. The Committee may accelerate the
exercisability of any or all outstanding SARs at any time for any reason. SARs
may only be exercised while the Participant is employed by, or providing service
to, the Employer or during the applicable period after termination of employment
or service as described in Section 7(d). A tandem SAR shall be exercisable only
during the period when the Option to which it is related is also exercisable.

 

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(iv)                              Grants to Non-Exempt Employees. SARs granted
to persons who are non-exempt employees under the Fair Labor Standards Act of
1938, as amended, may not be exercisable for at least six months after the date
of grant (except that such SARs may become exercisable, as determined by the
Committee, upon the Participant’s death, Disability or retirement, or upon a
Change of Control or other circumstances permitted by applicable regulations).

 

(v)                                 Value of SARs. When a Participant exercises
SARs, the Participant shall receive in settlement of such SARs an amount equal
to the value of the stock appreciation for the number of SARs exercised. The
stock appreciation for an SAR is the amount by which the Fair Market Value of
the underlying Company Stock on the date of exercise of the SAR exceeds the base
amount of the SAR as described in subsection (i).

 

(vi)                              Form of Payment. The Committee shall determine
whether the stock appreciation for an SAR shall be paid in the form of shares of
Company Stock, cash or a combination of the two. For purposes of calculating the
number of shares of Company Stock to be received, shares of Company Stock shall
be valued at their Fair Market Value on the date of exercise of the SAR. If
shares of Company Stock are to be received upon exercise of an SAR, cash shall
be delivered in lieu of any fractional share.

 

(b)                                 Other Stock-Based Awards.  The Committee may
grant other awards not specified in Sections 7, 8 or 9 above that are based on
or measured by Company Stock to Employees, Consultants and Non-Employee
Directors, on such terms and conditions as the Committee deems appropriate.
Other Stock-Based Awards may be granted subject to achievement of performance
goals or other conditions and may be payable in Company Stock or cash, or in a
combination of the two, as determined by the Committee in the Grant Agreement.

 

11.                               Qualified Performance-Based Compensation

 

(a)                                  Designation as Qualified Performance-Based
Compensation.  The Committee may determine that Stock Units, Stock Awards, SARs
or Other Stock-Based Awards granted to an Employee shall be considered
“qualified performance-based compensation” under section 162(m) of the Code, in
which case the provisions of this Section 11 shall apply to such Grants. The
Committee may also grant Options under which the exercisability of the Options
is subject to achievement of performance goals as described in this Section 11
or otherwise.

 

(b)                                 Performance Goals.  When Grants are made
under this Section 11, the Committee shall establish in writing (i) the
objective performance goals that must be met, (ii) the period during which
performance will be measured, (iii) the maximum amounts that may be paid if the
performance goals are met, and (iv) any other conditions that the Committee
deems appropriate and consistent with the requirements of section 162(m) of the
Code for “qualified performance-based compensation.” The performance goals shall
satisfy the requirements for “qualified performance-based compensation,”
including the requirement that the achievement of the goals be substantially
uncertain at the time they are established and that the performance goals be
established in such a way that a third party with knowledge of the relevant
facts could determine whether and to what extent the performance goals have been
met. The Committee shall not have discretion to increase the amount of
compensation that is payable, but may reduce the amount of compensation that is
payable, pursuant to Grants identified by the Committee as “qualified
performance-based compensation.”

 

(c)                                  Criteria Used for Objective Performance
Goals.  The Committee shall use objectively determinable performance goals based
on one or more of the following criteria: stock price, earnings per share,
price-earnings multiples, gross profit, net earnings, operating earnings,
revenue, revenue growth, number of days sales outstanding in accounts
receivable, number of days of cost of sales in inventory, productivity, margin,
EBITDA (earnings before interest, taxes, depreciation and amortization), net
capital employed, return on assets, shareholder return, return on equity, return
on capital employed, growth in assets, unit volume, sales, cash flow, market
share, relative performance to a comparison group designated by the Committee,
debt reduction, market capitalization or strategic business criteria consisting
of one or more objectives based on meeting specified R&D programs, new product
releases, revenue goals, market penetration goals, customer growth, geographic
business expansion goals, cost targets, quality improvements, cycle time
reductions, manufacturing improvements and/or efficiencies, human resource
programs, customer programs, goals relating to acquisitions or divestitures or
goals relating to FDA or other regulatory approvals. The performance

 

9

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goals may relate to one or more business units or the performance of the Company
as a whole, or any combination of the foregoing. Performance goals need not be
uniform as among Participants. Performance goals may be set on a pre tax or
after tax basis, may be defined by absolute or relative measures, and may be
valued on a growth or fixed basis.

 

(d)                                 Timing of Establishment of Goals.  The
Committee shall establish the performance goals in writing either before the
beginning of the performance period or during a period ending no later than the
earlier of (i) 90 days after the beginning of the performance period or (ii) the
date on which 25% of the performance period has been completed, or such other
date as may be required or permitted under applicable regulations under
section 162(m) of the Code.

 

(e)                                  Certification of Results.  The Committee
shall certify the performance results for the performance period specified in
the Grant Agreement after the performance period ends. The Committee shall
determine the amount, if any, to be paid pursuant to each Grant based on the
achievement of the performance goals and the satisfaction of all other terms of
the Grant Agreement.

 

(f)                                    Death, Disability or Other
Circumstances.  The Committee may provide in the Grant Agreement that Grants
under this Section 11 shall be payable, in whole or in part, in the event of the
Participant’s death or Disability, a Change of Control or under other
circumstances consistent with the Treasury regulations and rulings under
section 162(m) of the Code.

 

12.                               Deferrals

 

The Committee may permit or require a Participant to defer receipt of the
payment of cash or the delivery of shares that would otherwise be due to the
Participant in connection with any Grant. The Committee shall establish
rules and procedures for any such deferrals, consistent with applicable
requirements of section 409A of the Code.

 

13.                               Withholding of Taxes

 

(a)                                  Required Withholding.  All Grants under the
Plan shall be subject to applicable federal (including FICA), state and local
tax withholding requirements. The Company may require that the Participant or
other person receiving or exercising Grants pay to the Company the amount of any
federal, state or local taxes that the Company is required to withhold with
respect to such Grants, or the Company may deduct from other wages paid by the
Company the amount of any withholding taxes due with respect to such Grants.

 

(b)                                 Election to Withhold Shares.  If the
Committee so permits, a Participant may elect to satisfy the Company’s tax
withholding obligation with respect to Grants paid in Company Stock by having
shares withheld, at the time such Grants become taxable, up to an amount that
does not exceed the minimum applicable withholding tax rate for federal
(including FICA), state and local tax liabilities. The election must be in a
form and manner prescribed by the Committee.

 

14.                               Transferability of Grants

 

(a)                                  Restrictions on Transfer.  Except as
described in subsection (b) below, only the Participant may exercise rights
under a Grant during the Participant’s lifetime, and a Participant may not
transfer those rights except by will or by the laws of descent and distribution.
When a Participant dies, the personal representative or other person entitled to
succeed to the rights of the Participant may exercise such rights. Any such
successor must furnish proof satisfactory to the Company of his or her right to
receive the Grant under the Participant’s will or under the applicable laws of
descent and distribution.

 

(b)                                 Transfer of Nonqualified Stock Options to or
for Family Members.  Notwithstanding the foregoing, the Committee may provide,
in a Grant Agreement, that a Participant may transfer Nonqualified Stock Options
to family members, or one or more trusts or other entities for the benefit of or
owned by family members, consistent with the applicable securities laws,
according to such terms as the Committee may determine; provided that the
Participant receives no consideration for the transfer of an Option and the
transferred Option shall continue to be subject to the same terms and conditions
as were applicable to the Option immediately before the transfer.

 

10

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15.                               Consequences of a Change of Control

 

In the event of a Change of Control, the Committee may take any one or more of
the following actions with respect to any or all outstanding Grants, without the
consent of any Participant: (i) the Committee may determine that outstanding
Options and SARs shall be fully exercisable, and restrictions on outstanding
Stock Awards and Stock Units shall lapse, as of the date of the Change of
Control or at such other time or subject to specific conditions as the Committee
determines, (ii) the Committee may require that Participants surrender their
outstanding Options and SARs in exchange for one or more payments by the
Company, in cash or Company Stock as determined by the Committee, in an amount
equal to the amount by which the then Fair Market Value of the shares of Company
Stock subject to the Participant’s unexercised Options and SARs exceeds the
Exercise Price, if any, and on such terms as the Committee determines,
(iii) after giving Participants an opportunity to exercise their outstanding
Options and SARs, the Committee may terminate any or all unexercised Options and
SARs at such time as the Committee deems appropriate, (iv) with respect to
Participants holding Stock Units or Other Stock-Based Awards, the Committee may
determine that such Participants shall receive one or more payments in
settlement of such Stock Units or Other Stock-Based Awards, in such amount and
form and on such terms as may be determined by the Committee, or (v) the
Committee may determine that Grants that remain outstanding after the Change of
Control shall be converted to similar grants of the surviving corporation (or a
parent or subsidiary of the surviving corporation). Such acceleration,
surrender, termination, settlement or assumption shall take place as of the date
of the Change of Control or such other date as the Committee may specify.

 

16.                               Requirements for Issuance of Shares

 

No Company Stock shall be issued in connection with any Grant hereunder unless
and until all legal requirements applicable to the issuance of such Company
Stock have been complied with to the satisfaction of the Committee. The
Committee shall have the right to condition any Grant made to any Participant
hereunder on such Participant’s undertaking in writing to comply with such
restrictions on his or her subsequent disposition of such shares of Company
Stock as the Committee shall deem necessary or advisable, and certificates
representing such shares may be legended to reflect any such restrictions.
Certificates representing shares of Company Stock issued under the Plan will be
subject to such stop-transfer orders and other restrictions as may be required
by applicable laws, regulations and interpretations, including any requirement
that a legend be placed thereon. No Participant shall have any right as a
shareholder with respect to Company Stock covered by a Grant until shares have
been issued to the Participant.

 

17.                               Amendment and Termination of the Plan

 

(a)                                  Amendment.  The Board may amend or
terminate the Plan at any time; provided, however, that the Board shall not
amend the Plan without approval of the shareholders of the Company if such
approval is required in order to comply with the Code or applicable laws, or to
comply with applicable stock exchange requirements. No amendment or termination
of this Plan shall, without the consent of the Participant, materially impair
any rights or obligations under any Grant previously made to the Participant
under the Plan, unless such right has been reserved in the Plan or the Grant
Agreement, or except as provided in Section 18(b) below. Notwithstanding
anything in the Plan to the contrary, the Board may amend the Plan in such
manner as it deems appropriate in the event of a change in applicable law or
regulations.

 

(b)                                 Shareholder Approval for “Qualified
Performance-Based Compensation.”  If Grants are made under Section 11 above, the
Plan must be reapproved by the Company’s shareholders no later than the first
shareholders meeting that occurs in the fifth year following the year in which
the shareholders previously approved the provisions of Section 11, if additional
Grants are to be made under Section 11 and if required by section 162(m) of the
Code or the regulations thereunder.

 

(c)                                  Termination of Plan.  The Plan shall
terminate on the day immediately preceding the tenth anniversary of its
Effective Date, unless the Plan is terminated earlier by the Board or is
extended by the Board with the approval of the shareholders. The termination of
the Plan shall not impair the power and authority of the Committee with respect
to an outstanding Grant.

 

11

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18.                               Miscellaneous

 

(a)                                  Grants in Connection with Corporate
Transactions and Otherwise.  Nothing contained in this Plan shall be construed
to (i) limit the right of the Committee to make Grants under this Plan in
connection with the acquisition, by purchase, lease, merger, consolidation or
otherwise, of the business or assets of any corporation, firm or association,
including Grants to employees thereof who become Employees, or for other proper
corporate purposes, or (ii) limit the right of the Company to grant stock
options or make other stock-based awards outside of this Plan. Without limiting
the foregoing, the Committee may make a Grant to an employee of another
corporation who becomes an Employee by reason of a corporate merger,
consolidation, acquisition of stock or property, reorganization or liquidation
involving the Company in substitution for a grant made by such corporation. The
terms and conditions of the Grants may vary from the terms and conditions
required by the Plan and from those of the substituted stock incentives, as
determined by the Committee

 

(b)                                 Compliance with Law.  The Plan, the exercise
of Options and the obligations of the Company to issue or transfer shares of
Company Stock under Grants shall be subject to all applicable laws and to
approvals by any governmental or regulatory agency as may be required. With
respect to persons subject to section 16 of the Exchange Act, it is the intent
of the Company that the Plan and all transactions under the Plan comply with all
applicable provisions of Rule 16b-3 or its successors under the Exchange Act. In
addition, it is the intent of the Company that Incentive Stock Options comply
with the applicable provisions of section 422 of the Code, that Grants of
“qualified performance-based compensation” comply with the applicable provisions
of section 162(m) of the Code and that, to the extent applicable, Grants comply
with the requirements of section 409A of the Code. To the extent that any legal
requirement of section 16 of the Exchange Act or section 422, 162(m) or 409A of
the Code as set forth in the Plan ceases to be required under section 16 of the
Exchange Act or section 422, 162(m) or 409A of the Code, that Plan provision
shall cease to apply. The Committee may revoke any Grant if it is contrary to
law or modify a Grant to bring it into compliance with any valid and mandatory
government regulation. The Committee may also adopt rules regarding the
withholding of taxes on payments to Participants. The Committee may, in its sole
discretion, agree to limit its authority under this Section.

 

(c)                                  Enforceability.  The Plan shall be binding
upon and enforceable against the Company and its successors and assigns.

 

(d)                                 Funding of the Plan; Limitation on Rights. 
This Plan shall be unfunded. The Company shall not be required to establish any
special or separate fund or to make any other segregation of assets to assure
the payment of any Grants under this Plan. Nothing contained in the Plan and no
action taken pursuant hereto shall create or be construed to create a fiduciary
relationship between the Company and any Participant or any other person. No
Participant or any other person shall under any circumstances acquire any
property interest in any specific assets of the Company. To the extent that any
person acquires a right to receive payment from the Company hereunder, such
right shall be no greater than the right of any unsecured general creditor of
the Company.

 

(e)                                  Rights of Participants.  Nothing in this
Plan shall entitle any Employee, Non-Employee Director or other person to any
claim or right to receive a Grant under this Plan. Neither this Plan nor any
action taken hereunder shall be construed as giving any individual any rights to
be retained by or in the employment or service of the Employer.

 

(f)                                    No Fractional Shares.  No fractional
shares of Company Stock shall be issued or delivered pursuant to the Plan or any
Grant. The Committee shall determine whether cash, other awards or other
property shall be issued or paid in lieu of such fractional shares or whether
such fractional shares or any rights thereto shall be forfeited or otherwise
eliminated.

 

(g)                                 Employees Subject to Taxation Outside the
United States.  With respect to Participants who are subject to taxation in
countries other than the United States, the Committee may make Grants on such
terms and conditions as the Committee deems appropriate to comply with the laws
of the applicable countries, and the Committee may create such procedures,
addenda and subplans and make such modifications as may be necessary or
advisable to comply with such laws.

 

(h)                                 Governing Law.  The validity, construction,
interpretation and effect of the Plan and Grant

 

12

--------------------------------------------------------------------------------

 

Agreements issued under the Plan shall be governed and construed by and
determined in accordance with the laws of the State of Delaware, without giving
effect to the conflict of laws provisions thereof.

 

13

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ISOLAGEN, INC.

 

2005 EQUITY INCENTIVE PLAN

 

INCENTIVE STOCK OPTION GRANT

 

This STOCK OPTION GRANT, dated as of                               , (the “Date
of Grant”), is delivered by Isolagen, Inc. (the “Company”) to
                               (the “Grantee”).

 

RECITALS

 

The Isolagen, Inc. 2005 Equity Incentive Plan (the “Plan”) provides for the
grant of options to purchase shares of common stock of the Company.  The
Compensation Committee of the Committee of Directors of the Company (the
“Committee”) has decided to make a stock option grant as an inducement for the
Grantee to promote the best interests of the Company and its shareholders.

 

NOW, THEREFORE, the parties to this Agreement, intending to be legally bound
hereby, agree as follows:

 

1.                                       Grant of Option.

 

(a)                                  Subject to the terms and conditions set
forth in this Agreement and in the Plan, the Company hereby grants to the
Grantee an incentive stock option (the “Option”) to purchase          shares of
common stock of the Company (“Shares”) at an exercise price of $           per
Share.  The Option shall become exercisable according to Paragraph 2 below.

 

(b)                                 The Option is designated as an incentive
stock option, as described in Paragraph 5 below.  However, if and to the extent
the Option exceeds the limits for an incentive stock option, as described in
Paragraph 5, the Option shall be a nonqualified stock option.

 

2.                                       Exercisability of Option.  The Option
shall become exercisable on the following dates, if the Grantee is employed by,
or providing service to, the Employer (as defined in the Plan) on the applicable
date:

 

Date

 

Shares for Which the Option is Exercisable

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The exercisability of the Option is cumulative, but shall not exceed 100% of the
Shares subject to the Option.  If the foregoing schedule would produce
fractional Shares, the number of Shares for which the Option becomes exercisable
shall be rounded down to the nearest whole Share.

 

3.                                       Term of Option.

 

(a)                                  The Option shall have a term of       
years from the Date of Grant and shall terminate at the expiration of that
period, unless it is terminated at an earlier date pursuant to the provisions of
this Agreement or the Plan.

 

(b)                                 The Option shall automatically terminate
upon the happening of the first of the following events:

 

--------------------------------------------------------------------------------

 

(i)                                     The expiration of the three-month period
after the Grantee ceases to be employed by, or provide service to, the Employer,
if the termination is for any reason other than Disability (as defined in the
Plan), death or Cause (as defined in the Plan).

 

(ii)                                  The expiration of the one-year period
after the Grantee ceases to be employed by, or provide service to, the Employer
on account of the Grantee’s Disability.

 

(iii)                               The expiration of the one-year period after
the Grantee ceases to be employed by, or provide service to, the Employer, if
the Grantee dies while employed by, or providing service to, the Employer or
while the Option remains outstanding as described in subparagraph (i) or
(ii) above.

 

(iv)                              The date on which the Grantee ceases to be
employed by, or provide service to, the Employer for Cause.  In addition,
notwithstanding the prior provisions of this Paragraph 3, if the Grantee engages
in conduct that constitutes Cause after the Grantee’s employment or service
terminates, the Option shall immediately terminate.

 

Notwithstanding the foregoing, in no event may the Option be exercised after the
date that is immediately before the        anniversary of the Date of Grant. 
Any portion of the Option that is not exercisable at the time the Grantee ceases
to be employed by, or provide service to, the Employer shall immediately
terminate.

 

4.                                       Exercise Procedures.

 

(a)                                  Subject to the provisions of Paragraphs 2
and 3 above, the Grantee may exercise part or all of the exercisable Option by
giving the Company written notice of intent to exercise in the manner provided
in this Agreement, specifying the number of Shares as to which the Option is to
be exercised and the method of payment.  Payment of the exercise price shall be
made in accordance with procedures established by the Committee from time to
time based on type of payment being made but, in any event, prior to issuance of
the Shares.  The Grantee shall pay the exercise price (i) in cash, (ii) with the
approval of the Committee, by delivering Shares of the Company, which shall be
valued at their fair market value on the date of delivery, or by attestation (on
a form prescribed by the Committee) to ownership of Shares having a fair market
value on the date of exercise equal to the exercise price, (iii) by payment
through a broker in accordance with procedures permitted by Regulation T of the
Federal Reserve Board or (iv) by such other method as the Committee may
approve.  The Committee may impose from time to time such limitations as it
deems appropriate on the use of Shares of the Company to exercise the Option.

 

(b)                                 The obligation of the Company to deliver
Shares upon exercise of the Option shall be subject to all applicable laws,
rules, and regulations and such approvals by governmental agencies as may be
deemed appropriate by the Committee, including such actions as Company counsel
shall deem necessary or appropriate to comply with relevant securities laws and
regulations.  The Company may require that the Grantee (or other person
exercising the Option after the Grantee’s death) represent that the Grantee is
purchasing Shares for the Grantee’s own account and not with a view to or for
sale in connection with any distribution of the Shares, or such other
representation as the Committee deems appropriate.

 

(c)                                  All obligations of the Company under this
Agreement shall be subject to the rights of the Company as set forth in the Plan
to withhold amounts required to be withheld for any taxes, if applicable. 
Subject to Committee approval, the Grantee may elect to satisfy any tax
withholding obligation of the Employer with respect to the Option by having
Shares withheld up to an amount that does not exceed the minimum applicable
withholding tax rate for federal (including FICA), state and local tax
liabilities.

 

5.                                       Designation as Incentive Stock Option.

 

(a)                                  This Option is designated an incentive
stock option under Section 422 of the Internal Revenue Code of 1986, as amended
(the “Code”).  If the aggregate fair market value of the stock on the date of
the grant with respect to which incentive stock options are exercisable for the
first time by the Grantee during any calendar year, under the Plan or any other
stock option plan of the Company or a parent or subsidiary, exceeds $100,000,
then the

 

2

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Option, as to the excess, shall be treated as a nonqualified stock option that
does not meet the requirements of Section 422.  If and to the extent that the
Option fails to qualify as an incentive stock option under the Code, the Option
shall remain outstanding according to its terms as a nonqualified stock option.

 

(b)                                 The Grantee understands that favorable
incentive stock option tax treatment is available only if the Option is
exercised while the Grantee is an employee of the Company or a parent or
subsidiary of the Company or within a period of time specified in the Code after
the Grantee ceases to be an employee.  The Grantee understands that the Grantee
is responsible for the income tax consequences of the Option, and, among other
tax consequences, the Grantee understands that he or she may be subject to the
alternative minimum tax under the Code in the year in which the Option is
exercised.  The Grantee will consult with his or her tax adviser regarding the
tax consequences of the Option.

 

(c)                                  The Grantee agrees that the Grantee shall
immediately notify the Company in writing if the Grantee sells or otherwise
disposes of any Shares acquired upon the exercise of the Option and such sale or
other disposition occurs on or before the later of (i) two years after the Date
of Grant or (ii) one year after the exercise of the Option.  The Grantee also
agrees to provide the Company with any information requested by the Company with
respect to such sale or other disposition.

 

6.                                       Change of Control.  The provisions of
the Plan applicable to a Change of Control shall apply to the Option, and, in
the event of a Change of Control, the Committee may take such actions as it
deems appropriate pursuant to the Plan.

 

7.                                       Restrictions on Exercise.  Only the
Grantee may exercise the Option during the Grantee’s lifetime.  After the
Grantee’s death, the Option shall be exercisable (subject to the limitations
specified in the Plan) solely by the legal representatives of the Grantee, or by
the person who acquires the right to exercise the Option by will or by the laws
of descent and distribution, to the extent that the Option is exercisable
pursuant to this Agreement.

 

8.                                       Grant Subject to Plan Provisions.  This
grant is made pursuant to the Plan, the terms of which are incorporated herein
by reference, and in all respects shall be interpreted in accordance with the
Plan.  The grant and exercise of the Option are subject to interpretations,
regulations and determinations concerning the Plan established from time to time
by the Committee in accordance with the provisions of the Plan, including, but
not limited to, provisions pertaining to (i) rights and obligations with respect
to withholding taxes, (ii) the registration, qualification or listing of the
Shares, (iii) changes in capitalization of the Company and (iv) other
requirements of applicable law.  The Committee shall have the authority to
interpret and construe the Option pursuant to the terms of the Plan, and its
decisions shall be conclusive as to any questions arising hereunder.

 

9.                                       No Employment or Other Rights.  The
grant of the Option shall not confer upon the Grantee any right to be retained
by or in the employ or service of the Employer and shall not interfere in any
way with the right of the Employer to terminate the Grantee’s employment or
service at any time.  The right of the Employer to terminate at will the
Grantee’s employment or service at any time for any reason is specifically
reserved.

 

10.                                 No Shareholder Rights.  Neither the Grantee,
nor any person entitled to exercise the Grantee’s rights in the event of the
Grantee’s death, shall have any of the rights and privileges of a shareholder
with respect to the Shares subject to the Option, until certificates for Shares
have been issued upon the exercise of the Option.

 

11.                                 Assignment and Transfers.  The rights and
interests of the Grantee under this Agreement may not be sold, assigned,
encumbered or otherwise transferred except, in the event of the death of the
Grantee, by will or by the laws of descent and distribution.  In the event of
any attempt by the Grantee to alienate, assign, pledge, hypothecate, or
otherwise dispose of the Option or any right hereunder, except as provided for
in this Agreement, or in the event of the levy or any attachment, execution or
similar process upon the rights or interests hereby conferred, the Company may
terminate the Option by notice to the Grantee, and the Option and all rights
hereunder shall thereupon become null and void.  The rights and protections of
the Company hereunder shall extend to any successors or assigns of the Company
and to the Company’s parents, subsidiaries, and affiliates.  This Agreement may
be assigned by the Company without the Grantee’s consent.

 

3

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12.                                 Applicable Law.  The validity, construction,
interpretation and effect of this instrument shall be governed by and construed
in accordance with the laws of the State of Delaware, without giving effect to
the conflicts of laws provisions thereof.

 

13.                                 Notice.  Any notice to the Company provided
for in this instrument shall be addressed to the Company in care of the General
Counsel at 405 Eagleview Blvd., Exton, PA  19341, and any notice to the Grantee
shall be addressed to such Grantee at the current address shown on the payroll
of the Employer, or to such other address as the Grantee may designate to the
Employer in writing.  Any notice shall be delivered by hand, sent by telecopy or
enclosed in a properly sealed envelope addressed as stated above, registered and
deposited, postage prepaid, in a post office regularly maintained by the United
States Postal Service.

 

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

4

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IN WITNESS WHEREOF, the Company has caused its duly authorized officers to
execute and attest this Agreement, and the Grantee has executed this Agreement,
effective as of the Date of Grant.

 

 

 

ISOLAGEN, INC.

 

 

Attest:

 

 

 

 

 

 

 

By:

 

 

 

 

I hereby accept the Option described in this Agreement, and I agree to be bound
by the terms of the Plan and this Agreement.  I hereby further agree that all
the decisions and determinations of the Committee shall be final and binding.

 

 

Grantee:

 

 

 

 

 

 

 

Date:

 

 

 

 

5

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ISOLAGEN, INC.

 

2005 EQUITY INCENTIVE PLAN

 

NONQUALIFIED STOCK OPTION GRANT

 

This STOCK OPTION GRANT, dated as of                                    (the
“Date of Grant”), is delivered by Isolagen, Inc. (the “Company”) to
                               (the “Grantee”).

 

RECITALS

 

The Isolagen, Inc. 2005 Equity Incentive Plan (the “Plan”) provides for the
grant of options to purchase shares of common stock of the Company.  The
Compensation Committee of the Committee of Directors of the Company (the
“Committee”) has decided to make a stock option grant as an inducement for the
Grantee to promote the best interests of the Company and its shareholders.

 

NOW, THEREFORE, the parties to this Agreement, intending to be legally bound
hereby, agree as follows:

 

1.                                       Grant of Option.  Subject to the terms
and conditions set forth in this Agreement and in the Plan, the Company hereby
grants to the Grantee a nonqualified stock option (the “Option”) to purchase
                       shares of common stock of the Company (“Shares”) at an
exercise price of $                   per Share.  The Option shall become
exercisable according to Paragraph 2 below.

 

2.                                       Exercisability of Option.  The Option
shall become exercisable on the following dates, if the Grantee is employed by,
or providing service to, the Employer (as defined in the Plan) on the applicable
date:

 

Date

 

Shares for Which the Option is Exercisable

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The exercisability of the Option is cumulative, but shall not exceed 100% of the
Shares subject to the Option.  If the foregoing schedule would produce
fractional Shares, the number of Shares for which the Option becomes exercisable
shall be rounded down to the nearest whole Share.

 

3.                                       Term of Option.

 

(a)                                  The Option shall have a term of       
years from the Date of Grant and shall terminate at the expiration of that
period, unless it is terminated at an earlier date pursuant to the provisions of
this Agreement or the Plan.

 

(b)                                 The Option shall automatically terminate
upon the happening of the first of the following events:

 

(i)                                     The expiration of the three-month period
after the Grantee ceases to be employed by, or provide service to, the Employer,
if the termination is for any reason other than Disability (as defined in the
Plan), death or Cause (as defined in the Plan).

 

(ii)                                  The expiration of the one-year period
after the Grantee ceases to be employed by, or provide service to, the Employer
on account of the Grantee’s Disability.

 

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(iii)                               The expiration of the one-year period after
the Grantee ceases to be employed by, or provide service to, the Employer, if
the Grantee dies while employed by, or providing service to, the Employer or
while the Option remains outstanding as described in subparagraph (i) or
(ii) above.

 

(iv)                              The date on which the Grantee ceases to be
employed by, or provide service to, the Employer for Cause.  In addition,
notwithstanding the prior provisions of this Paragraph 3, if the Grantee engages
in conduct that constitutes Cause after the Grantee’s employment or service
terminates, the Option shall immediately terminate.

 

Notwithstanding the foregoing, in no event may the Option be exercised after the
date that is immediately before the        anniversary of the Date of Grant. 
Any portion of the Option that is not exercisable at the time the Grantee ceases
to be employed by, or provide service to, the Employer shall immediately
terminate.

 

[The foregoing provision may be amended by the Compensation Committee as its
discretion.]

 

4.                                       Exercise Procedures.

 

(a)                                  Subject to the provisions of Paragraphs 2
and 3 above, the Grantee may exercise part or all of the exercisable Option by
giving the Company written notice of intent to exercise in the manner provided
in this Agreement, specifying the number of Shares as to which the Option is to
be exercised and the method of payment.  Payment of the exercise price shall be
made in accordance with procedures established by the Committee from time to
time based on type of payment being made but, in any event, prior to issuance of
the Shares.  The Grantee shall pay the exercise price (i) in cash, (ii) with the
approval of the Committee, by delivering Shares of the Company, which shall be
valued at their fair market value on the date of delivery, or by attestation (on
a form prescribed by the Committee) to ownership of Shares having a fair market
value on the date of exercise equal to the exercise price, (iii) by payment
through a broker in accordance with procedures permitted by Regulation T of the
Federal Reserve Board or (iv) by such other method as the Committee may
approve.  The Committee may impose from time to time such limitations as it
deems appropriate on the use of Shares of the Company to exercise the Option.

 

(b)                                 The obligation of the Company to deliver
Shares upon exercise of the Option shall be subject to all applicable laws,
rules, and regulations and such approvals by governmental agencies as may be
deemed appropriate by the Committee, including such actions as Company counsel
shall deem necessary or appropriate to comply with relevant securities laws and
regulations.  The Company may require that the Grantee (or other person
exercising the Option after the Grantee’s death) represent that the Grantee is
purchasing Shares for the Grantee’s own account and not with a view to or for
sale in connection with any distribution of the Shares, or such other
representation as the Committee deems appropriate.

 

(c)                                  All obligations of the Company under this
Agreement shall be subject to the rights of the Company as set forth in the Plan
to withhold amounts required to be withheld for any taxes, if applicable. 
Subject to Committee approval, the Grantee may elect to satisfy any tax
withholding obligation of the Employer with respect to the Option by having
Shares withheld up to an amount that does not exceed the minimum applicable
withholding tax rate for federal (including FICA), state and local tax
liabilities.

 

5.                                       Change of Control.  The provisions of
the Plan applicable to a Change of Control shall apply to the Option, and, in
the event of a Change of Control, the Committee may take such actions as it
deems appropriate pursuant to the Plan.

 

6.                                       Restrictions on Exercise.  Except as
the Committee may otherwise permit pursuant to the Plan, only the Grantee may
exercise the Option during the Grantee’s lifetime and, after the Grantee’s
death, the Option shall be exercisable (subject to the limitations specified in
the Plan) solely by the legal representatives of the Grantee, or by the person
who acquires the right to exercise the Option by will or by the laws of descent
and distribution, to the extent that the Option is exercisable pursuant to this
Agreement.

 

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7.                                       Grant Subject to Plan Provisions.  This
grant is made pursuant to the Plan, the terms of which are incorporated herein
by reference, and in all respects shall be interpreted in accordance with the
Plan.  The grant and exercise of the Option are subject to interpretations,
regulations and determinations concerning the Plan established from time to time
by the Committee in accordance with the provisions of the Plan, including, but
not limited to, provisions pertaining to (i) rights and obligations with respect
to withholding taxes, (ii) the registration, qualification or listing of the
Shares, (iii) changes in capitalization of the Company and (iv) other
requirements of applicable law.  The Committee shall have the authority to
interpret and construe the Option pursuant to the terms of the Plan, and its
decisions shall be conclusive as to any questions arising hereunder.

 

8.                                       No Employment or Other Rights.  The
grant of the Option shall not confer upon the Grantee any right to be retained
by or in the employ or service of the Employer and shall not interfere in any
way with the right of the Employer to terminate the Grantee’s employment or
service at any time. The right of the Employer to terminate at will the
Grantee’s employment or service at any time for any reason is specifically
reserved.

 

9.                                       No Shareholder Rights.  Neither the
Grantee, nor any person entitled to exercise the Grantee’s rights in the event
of the Grantee’s death, shall have any of the rights and privileges of a
shareholder with respect to the Shares subject to the Option, until certificates
for Shares have been issued upon the exercise of the Option.

 

10.                                 Assignment and Transfers.  Except as the
Committee may otherwise permit pursuant to the Plan, the rights and interests of
the Grantee under this Agreement may not be sold, assigned, encumbered or
otherwise transferred except, in the event of the death of the Grantee, by will
or by the laws of descent and distribution.  In the event of any attempt by the
Grantee to alienate, assign, pledge, hypothecate, or otherwise dispose of the
Option or any right hereunder, except as provided for in this Agreement, or in
the event of the levy or any attachment, execution or similar process upon the
rights or interests hereby conferred, the Company may terminate the Option by
notice to the Grantee, and the Option and all rights hereunder shall thereupon
become null and void.  The rights and protections of the Company hereunder shall
extend to any successors or assigns of the Company and to the Company’s parents,
subsidiaries, and affiliates.  This Agreement may be assigned by the Company
without the Grantee’s consent.

 

11.                                 Applicable Law.  The validity, construction,
interpretation and effect of this instrument shall be governed by and construed
in accordance with the laws of the State of Delaware, without giving effect to
the conflicts of laws provisions thereof.

 

12.                                 Notice.  Any notice to the Company provided
for in this instrument shall be addressed to the Company in care of the General
Counsel at 405 Eagleview Blvd., Exton, PA  19341, and any notice to the Grantee
shall be addressed to such Grantee at the current address shown on the payroll
of the Employer, or to such other address as the Grantee may designate to the
Employer in writing.  Any notice shall be delivered by hand, sent by telecopy or
enclosed in a properly sealed envelope addressed as stated above, registered and
deposited, postage prepaid, in a post office regularly maintained by the United
States Postal Service.

 

 

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IN WITNESS WHEREOF, the Company has caused its duly authorized officers to
execute and attest this Agreement, and the Grantee has executed this Agreement,
effective as of the Date of Grant.

 

 

ISOLAGEN, INC.

 

 

Attest:

 

 

 

 

 

 

 

By:

 

 

 

 

I hereby accept the Option described in this Agreement, and I agree to be bound
by the terms of the Plan and this Agreement. I hereby further agree that all the
decisions and determinations of the Committee shall be final and binding.

 

 

Grantee:

 

 

 

 

 

 

 

Date:

 

 

 

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