EXHIBIT 10.5

 

GERON CORPORATION
2006 DIRECTORS’ STOCK OPTION PLAN

(As Amended and Restated Effective September 25, 2013)

 

1.             Purposes of the Plan.

 

The purposes of this Amended and Restated 2006 Directors’ Stock Option Plan are
to attract and retain the best available personnel for service as Directors of
the Company, to provide additional incentive to the Outside Directors of the
Company to serve as Directors, and to encourage their continued service on the
Board.

 

All options granted hereunder shall be “nonqualified stock options”.  Awards of
Restricted Stock and Restricted Stock Units may also be granted under this Plan.

 

2.             Definitions.

 

As used herein, the following definitions shall apply:

 

(a)           “Award” shall mean an Option, a Restricted Stock award or a
Restricted Stock Unit award granted to an Outside Director pursuant to the Plan.

 

(b)           “Award Agreement” shall mean any written agreement, contract or
other instrument or document evidencing an Award, including through electronic
medium.

 

(c)           “Board” shall mean the Board of Directors of the Company.

 

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

 

(e)           “Common Stock” shall mean the Common Stock of the Company.

 

(f)            “Company” shall mean Geron Corporation, a Delaware corporation.

 

(g)           “Continuous Status as a Director” shall mean the absence of any
interruption or termination of service as a Director.

 

(h)           “Director” shall mean a member of the Board.

 

(i)            “Employee” shall mean any person, including officers and
directors, employed by the Company or any Parent or Subsidiary of the Company.
The payment of a director’s fee by the Company shall not be sufficient in and of
itself to constitute “employment” by the Company.

 

(j)            “Exchange Act” shall mean the Securities Exchange Act of 1934, as
amended.

 

(k)           “Option” shall mean a stock option granted pursuant to the Plan.
All Options shall be nonqualified stock options (i.e., options that are not
intended to qualify as incentive stock options under Section 422 of the Code).

 

(l)            “Outside Director” shall mean a Director who is not an Employee.

 

(m)          “Parent” shall mean a “parent corporation”, whether now or
hereafter existing, as defined in Section 424(e) of the Code.

 

(n)           “Participant” shall mean an Outside Director who receives an
Award.

 

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(o)           “Plan” shall mean this Amended and Restated 2006 Directors’ Stock
Option Plan, as it may be amended from time to time.

 

(p)           “Restricted Stock” shall mean an Award of Shares granted to an
Outside Director pursuant to Section 11.

 

(q)           “Restricted Stock Unit” shall mean an Award granted pursuant to
Section 12.

 

(r)            “Share” shall mean a share of the Common Stock, as adjusted in
accordance with Section 14 of the Plan.

 

(s)            “Subsidiary” shall mean a “subsidiary corporation”, whether now
or hereafter existing, as defined in Section 424(f) of the Code.

 

3.             Stock Subject to the Plan.

 

Subject to the provisions of Section 14 of the Plan, the maximum aggregate
number of Shares which may be issued pursuant to Awards granted under the Plan
is 2,500,000 Shares (the “Pool”) of Common Stock.  The Shares may be authorized,
but unissued, or reacquired Common Stock.

 

To the extent that an Award terminates, expires, or lapses for any reason, any
Shares subject to the Award shall again be available for the grant of an Award
pursuant to the Plan.  If Shares which were acquired upon exercise of an Option
are subsequently repurchased by the Company, such Shares shall not in any event
be returned to the Plan and shall not become available for future grant under
the Plan.  However, if unvested Shares of Restricted Stock are repurchased by
the Company at their original purchase price or forfeited back to the Company
for no consideration, such Shares shall become available for future grant under
the Plan.

 

4.             Administration of and Grants of Awards under the Plan.

 

(a)           Administrator.  Except as otherwise required herein, the Plan
shall be administered by the Board.

 

(b)           Procedure for Grants.  All grants of Options pursuant to Section 5
shall be automatic and non-discretionary and shall be made strictly in
accordance with the provisions set forth in Section 5.  In addition, the Board
may make discretionary grants of Options, Restricted Stock or Restricted Stock
Units.

 

(c)           Powers of the Board.  Subject to the provisions and restrictions
of the Plan, the Board shall have the authority, in its discretion: (i) to
determine, upon review of relevant information and in accordance with
Section 9(b) of the Plan, the fair market value of the Common Stock; (ii) to
determine the exercise price per share of Options to be granted, which exercise
price shall be determined in accordance with Section 9(a) of the Plan; (iii) to
interpret the Plan; (iv) to prescribe, amend and rescind rules and regulations
relating to the Plan; (v) to authorize any person to execute on behalf of the
Company any instrument required to effectuate the grant of an Award previously
granted hereunder; (vi) to make discretionary grants of Options, Restricted
Stock and Restricted Stock Units and to determine the terms and conditions of
such Awards, and (vii) to make all other determinations deemed necessary or
advisable for the administration of the Plan.

 

(d)           Effect of Board’s Decision.  All decisions, determinations and
interpretations of the Board shall be final and binding on all Participants and
any other holders of any Awards granted under the Plan.

 

(e)           Suspension or Termination of Option.  If the President or his or
her designee reasonably believes that a Participant has committed an act of
misconduct, the President may suspend the Participant’s right to exercise any
Option pending a determination by the Board (excluding the Outside Director
accused of such misconduct). If the Board (excluding the Outside Director
accused of such misconduct) determines a Participant has committed an act of
embezzlement, fraud, dishonesty,

 

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nonpayment of an obligation owed to the Company, breach of fiduciary duty or
deliberate disregard of the Company rules resulting in loss, damage or injury to
the Company, or if a Participant makes an unauthorized disclosure of any Company
trade secret or confidential information, engages in any conduct constituting
unfair competition, induces any Company customer to breach a contract with the
Company or induces any principal for whom the Company acts as agent to terminate
such agency relationship, neither the Participant nor his or her estate shall be
entitled to exercise any Option whatsoever and such Option shall immediately
terminate as of such determination (the “date of determination”).  In making
such determination, the Board (excluding the Outside Director accused of such
misconduct) shall act fairly and shall give the Participant an opportunity to
appear and present evidence on Participant’s behalf at a hearing before the
Board or a committee of the Board.

 

5.             Automatic Grant Program.

 

(a)           General.  No person shall have any discretion to select which
Outside Directors shall be granted Awards or to determine the number of Shares
to be covered by Awards granted to Outside Directors pursuant to this
Section 5.  Subject to the limitations set forth in Section 5(d), Outside
Directors shall receive automatic grants of Awards pursuant to this Section 5
for the number of Shares set forth below.

 

(b)           First Option.  Each Outside Director shall be automatically
granted an Option to purchase 70,000 Shares (the “First Option”) on the date on
which such person first becomes an Outside Director, whether through election by
the stockholders of the Company or appointment by the Board to fill a vacancy. 
For the avoidance of doubt, unless otherwise determined by the Board, the
Executive Chairman of the Board shall not receive a First Option pursuant to
this Section 5(b).

 

(c)           Subsequent Option.  Each Outside Director, other than an Outside
Director whose First Option is being granted on the date of the Annual Meeting
of the Company’s stockholders, shall be automatically granted an Option to
purchase 35,000 Shares (a “Subsequent Option”) on the date of the Annual Meeting
of the Company’s stockholders in each year of his service. For the avoidance of
doubt, unless otherwise determined by the Board, the Executive Chairman of the
Board shall not receive a Subsequent Option pursuant to this Section 5(c).

 

(d)           Limitations.

 

(i)            Notwithstanding the provisions of subsections 5(b) or (c) hereof,
in the event that a grant would cause the number of Shares subject to
outstanding Awards plus the number of Shares previously issued pursuant to
Awards to exceed the Pool, then each such automatic grant shall be for that
number of Shares determined by dividing the total number of Shares remaining
available for grant by the number of Outside Directors receiving an Award on
such date on the automatic grant date, rounded down to the nearest whole Share.
Any further grants shall then be deferred until such time, if any, as additional
Shares become available for grant under the Plan through action of the
stockholders to increase the number of Shares which may be issued under the Plan
or through cancellation or expiration of Awards previously granted hereunder.

 

(ii)           The terms of each Option granted under this Section 5 shall be as
follows:

 

(1)           the Option shall be exercisable only while the Outside Director
remains a Director of the Company, except as set forth in Section 10 hereof.

 

(2)           the exercise price per Share shall be 100% of the fair market
value per Share on the date of grant of the Option, determined in accordance
with Section 9 hereof.

 

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(3)           the First Option shall become exercisable in installments
cumulatively as to 33 1/3% of the Shares subject to the First Option on each of
the first, second and third anniversaries of the date of grant of the First
Option.

 

(4)           shares subject to a Subsequent Option shall be exercisable as to
one hundred percent (100%) of the Shares subject to the earlier to occur of
(A) the Annual Meeting of the Company’s stockholders or (B) the anniversary of
the date of grant of each Subsequent Option, provided that the Outside Director
continues to serve as a Director on the applicable vesting date. Notwithstanding
the foregoing, exercise of an Option is subject to limitation as provided in
Section 4(e) above.

 

6.             Eligibility.

 

Awards may be granted only to Outside Directors.  All Awards described in
Section 5 shall be automatically granted in accordance with the terms set forth
in Section 5.  In addition, the Board may make discretionary grants of Options,
Restricted Stock and/or Restricted Stock Units to Outside Directors.  An Outside
Director who has been granted an Award may, if he or she is otherwise eligible,
be granted an additional Award or Awards in accordance with such provisions.

 

The Plan (as well as any Award granted hereunder) shall not confer upon any
Participant any right with respect to continuation of service as a Director or
nomination to serve as a Director, nor shall it interfere in any way with any
rights which the Director or the Company may have to terminate his or her
directorship at any time.

 

7.             Term of Plan; Effective Date.

 

The Plan shall become effective upon its initial adoption by the Board and shall
continue in effect until it is terminated under Section 16 of the Plan.  No
Awards may be issued under the Plan after the tenth (10th) anniversary of the
earlier of (a) the date upon which the Plan is adopted by the Board or (b) the
date the Plan is approved by the stockholders.

 

8.             Term of Options.

 

The term of each Option granted pursuant to Section 5 shall be ten (10) years
from the date of grant thereof.  The term of each discretionary Option granted
pursuant to the Plan shall have a term specified by the Board at the time of
grant, which term shall not exceed ten (10) years from the date of grant
thereof.

 

9.             Exercise Price and Consideration.

 

(a)           Exercise Price.  The per Share exercise price for the Shares to be
issued pursuant to exercise of an Option shall be 100% of the fair market value
per Share on the date of grant of the Option.

 

(b)           Fair Market Value.  The fair market value shall be determined by
the Board; provided, however, that where there is a public market for the Common
Stock, the fair market value per Share shall be the mean of the bid and ask
prices of the Common Stock in the over-the-counter market on the date of grant,
or if no closing bid and asked prices were reported for such date, the date
immediately prior to such date during which closing bid and asked prices were
quoted for such Common Stock, in each case as reported in The Wall Street
Journal or such other source as the Board deems reliable or, in the event the
Common Stock is listed on any established stock exchange or a national market
system, the fair market value per Share shall be the closing sales price for a
share of such stock (or the closing bid, if no sales were reported) as quoted on
such exchange or system on the date of grant of the Option, or if no bids or
sales were reported for such date, then the closing sales price (or the closing
bid, if no sales were reported) on the trading date immediately prior to such
date during which a bid or sale occurred, in each case, as reported in The Wall
Street Journal or such other source as the Board deems reliable.

 

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(c)           Form of Consideration.  The consideration to be paid for the
Shares to be issued upon exercise of an Option shall consist entirely of cash,
check, other Shares of Common Stock having a fair market value on the date of
surrender equal to the aggregate exercise price of the Shares as to which said
Option shall be exercised (which, if acquired from the Company, shall have been
held for at least such holding period as is required in order to avoid a charge
to the Company’s earnings for financial statement purposes), or any combination
of such methods of payment and/or any other consideration or method of payment
as shall be permitted under applicable corporate law, including, without
limitation, by withholding Shares that would otherwise be issued upon the
exercise of such Option, subject to applicable laws and regulations concerning
withholding.

 

10.          Exercise of Option.

 

(a)           Procedure for Exercise; Rights as a Stockholder.  Any Option
granted pursuant to Section 5 shall be exercisable at such times as are set
forth in Section 5 hereof; provided, however, that no Options shall be
exercisable prior to stockholder approval of the Plan in accordance with
Section 20 hereof has been obtained.  Each discretionary Option granted pursuant
to the Plan shall be exercisable at such times specified by the Board at the
time of grant.

 

An Option may not be exercised for a fraction of a Share.

 

An Option shall be deemed to be exercised when written notice of such exercise
has been given to the Company in accordance with the terms of the Option by the
person entitled to exercise the Option and full payment for the Shares with
respect to which the Option is exercised has been received by the Company.  Full
payment may consist of any consideration and method of payment allowable under
Section 9(c).  Until the issuance (as evidenced by the appropriate entry on the
books of the Company or of a duly authorized transfer agent of the Company) of
the stock certificate evidencing such Shares, no right to vote or receive
dividends or any other rights as a stockholder shall exist with respect to the
Shares acquired upon exercise of an Option, notwithstanding the exercise of the
Option. A share certificate for the number of Shares so acquired shall be issued
to the Participant as soon as practicable after exercise of the Option. No
adjustment will be made for a dividend or other right for which the record date
is prior to the date the stock certificate is issued, except as provided in
Section 14.

 

Exercise of an Option in any manner shall result in a decrease in the number of
Shares which thereafter may be available, both for purposes of the Plan and for
sale under the Option, by the number of Shares as to which the Option is
exercised.  The post-termination exercise provisions set forth in Sections
10(b), 10(c) and 10(d) shall apply to Options automatically granted pursuant to
Section 5, and, to the extent provided by the Board at the time of grant, to
Options granted by the Board pursuant to its discretionary authority.  However,
Options granted by the Board pursuant to its discretionary authority may contain
post-termination exercise provisions which differ from those set forth below.

 

(b)           Termination of Status as a Director.  If an Outside Director
ceases to serve as a Director (other than by reason of the Participant’s death
or the total and permanent disability of the Participant as defined in Code
Section 22(e)(3) and subject to Section 4(e) hereof), he or she may, but only
within thirty-six (36) months from the date he or she ceases to be a Director of
the Company, exercise his or her Option to the extent that he or she was
entitled to exercise it at the date of such termination. Notwithstanding the
foregoing, in no event may the Option be exercised after its term set forth in
Section 8 has expired. To the extent that such Outside Director was not entitled
to exercise an Option at the date of such termination, or does not exercise such
Option (which he or she was entitled to exercise) within the time specified
herein, the Option shall terminate.  For the avoidance of doubt, if the Outside
Director commits an act described in Section 4(e) hereof, neither the Outside
Director nor his or her estate shall be entitled to exercise any Option
whatsoever and the Option shall terminate as of the date of determination
pursuant to Section 4(e) hereof.

 

(c)           Disability of Participant.  Notwithstanding Section 10(b) above,
in the event an Outside Director is unable to continue his or her service as a
Director of the Company as a result of his or her total and permanent disability
(as defined in Section 22(e)(3) of the Code), he or she may, but only

 

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within thirty-six (36) months from the date of such termination, exercise his or
her Option to the extent of the right to exercise that would have accrued had
the Participant remained in Continuous Status as Director for thirty-six (36)
months (or such lesser period of time as is determined by the Board) after the
date of such termination. Notwithstanding the foregoing, in no event may the
Option be exercised after its term set forth in Section 8 has expired. To the
extent that he or she does not exercise such Option (which he or she was
entitled to exercise) within the time specified herein, the Option shall
terminate.

 

(d)           Death of Participant.  In the event of the death of a Participant:

 

(i)            During the term of the Option, if the Participant is, at the time
of his or her death, a Director of the Company and has been in Continuous Status
as a Director since the date of grant of the Option, the Option may be
exercised, at any time within thirty-six (36) months following the date of
death, by the Participant’s estate or by a person who acquired the right to
exercise the Option by bequest or inheritance, but only to the extent of the
right to exercise that would have accrued had the Participant continued living
and remained in Continuous Status as Director for thirty-six (36) months (or
such lesser period of time as is determined by the Board) after the date of
death. Notwithstanding the foregoing, in no event may the Option be exercised
after its term set forth in Section 8 has expired.

 

11.          Restricted Stock.

 

(a)           General.  Restricted Stock may be issued to an Outside Director at
the discretion of the Board, in accordance with this Section 11.  The Board
shall specify the terms, conditions and restrictions related to the Restricted
Stock, including the number of Shares and the vesting restrictions (if any)
applicable to the Shares.  The Board shall also establish the purchase price, if
any, and form of payment for the Restricted Stock; provided, however, that if a
purchase price is charged, such purchase price shall be no less than the par
value of the Shares to be purchased, unless otherwise permitted by applicable
state law.  In all cases, legal consideration shall be required for each
issuance of Restricted Stock.

 

(b)           Repurchase or Forfeiture.  Unless the Board determines otherwise,
the Award Agreement evidencing a Restricted Stock Award granted under Section 11
shall grant the Company, upon the termination of the Participant’s Continuous
Status as a Director for any reason, the forfeiture of unvested Shares acquired
pursuant to an Award of Restricted Stock (or the right to repurchase such Shares
at the Outside Director’s original purchase price if the Outside Director paid a
price to acquire such Shares).

 

(c)           Other Provisions.  Restricted Stock shall be evidenced by an Award
Agreement which shall contain such other terms, provisions and conditions not
inconsistent with the Plan as may be determined by the Board in its sole
discretion.

 

(d)           Rights as a Stockholder.  Upon the issuance of the Restricted
Stock, the Participant shall have rights equivalent to those of a stockholder
and shall be a stockholder when his or her issuance or purchase is entered upon
the records of the duly authorized transfer agent of the Company.  No adjustment
shall be made for a dividend or other right for which the record date is prior
to the date of the Restricted Stock issuance, except as provided in Section 14
of the Plan.

 

(e)           Certificates for Restricted Stock.  Restricted Stock granted
pursuant to the Plan may be evidenced in such manner as the Board shall
determine.  Certificates or book entries evidencing shares of Restricted Stock
must include an appropriate legend referring to the terms, conditions, and
restrictions applicable to such Restricted Stock, and the Company may, in it
sole discretion, retain physical possession of any stock certificate until such
time as all applicable restrictions lapse.

 

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(f)            Section 83(b) Election.  If a Participant makes an election under
Section 83(b) of the Code to be taxed with respect to the Restricted Stock as of
the date of transfer of the Restricted Stock rather than as of the date or dates
upon which the Participant would otherwise be taxable under Section 83(a) of the
Code, the Participant shall be required to deliver a copy of such election to
the Company promptly after filing such election with the Internal Revenue
Service.

 

12.          Restricted Stock Units.

 

(a)           General.  An Outside Director selected by the Board may be granted
an award of Restricted Stock Units in the manner determined from time to time by
the Board.  The number and terms and conditions of Restricted Stock Units shall
be determined by the Board.

 

(b)           Vesting and Distribution.  The Board shall specify the date or
dates on which the Restricted Stock Units shall become fully vested and
nonforfeitable, and may specify such vesting conditions as it deems appropriate,
including continued service as a Director or conditions based on one or more
performance criteria.  The Board shall specify, or permit the Participant to
elect, the conditions and dates upon which the Shares underlying the Restricted
Stock Units shall be issued, which dates shall not be earlier than the date as
of which the Restricted Stock Units vest and become nonforfeitable and which
conditions and dates shall be exempt from or subject to compliance with
Section 409A of the Code.  Restricted Stock Units may be paid in cash, Shares,
or both, as determined by the Board.  On the distribution dates, to the extent
the Board determines that the Restricted Stock Units shall be paid in Shares,
the Company shall issue to the Participant one unrestricted, fully transferable
Share (or the fair market value of one such Share in cash) for each vested and
nonforfeitable Restricted Stock Unit.

 

(c)           Rights as a Stockholder.  Unless otherwise provided by the Board,
a Participant awarded Restricted Stock Units shall have no rights as a Company
stockholder with respect to such Restricted Stock Units until such time as the
Restricted Stock Units have vested and the Common Stock underlying the
Restricted Stock Units has been issued.

 

(d)           Other Terms.  All Restricted Stock Units shall be subject to such
additional terms and conditions as determined by the Board and shall be
evidenced by a written Award Agreement.

 

13.          Nontransferability of Awards.

 

An Award may not be sold, pledged, assigned, hypothecated, transferred, or
disposed of in any manner other than by will or by the laws of descent or
distribution or pursuant to a qualified domestic relations order (as defined by
the Code or the rules thereunder).  The designation of a beneficiary by a
Participant does not constitute a transfer.  An exercisable Option may be
exercised during the lifetime of a Participant only by the Participant or a
transferee permitted by this Section.

 

14.          Adjustments Upon Changes in Capitalization; Corporate Transactions.

 

(a)           Adjustment.  Subject to any required action by the stockholders of
the Company, the number of shares of Common Stock covered by each outstanding
Award, the number of shares of Common Stock which have been authorized for
issuance under the Plan but as to which no Awards have yet been granted or which
have been returned to the Plan upon cancellation, expiration or lapse of an
Award, and the number of shares of Common Stock to be granted under the
provisions set forth in Section 5 of the Plan, as well as the price per share of
Common Stock covered by each such outstanding Award, shall be proportionately
adjusted for any increase or decrease in the number of issued shares of Common
Stock resulting from a stock split, reverse stock split, stock dividend,
combination or reclassification of the Common Stock, or any other increase or
decrease in the number of issued shares of Common Stock effected without receipt
of consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been “effected
without receipt of consideration.” Such adjustment shall be

 

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made by the Board, whose determination in that respect shall be final, binding
and conclusive. Except as expressly provided herein, no issuance by the Company
of shares of stock of any class, or securities convertible into shares of stock
of any class, shall affect, and no adjustment by reason thereof shall be made
with respect to, the number or price of shares of Common Stock subject to an
Award.

 

(b)           Corporate Transactions.  In the event of (i) a dissolution or
liquidation of the Company, (ii) a sale of all or substantially all of the
Company’s assets, (iii) a merger or consolidation in which the Company is not
the surviving corporation, or (iv) any other capital reorganization in which
more than fifty percent (50%) of the shares of the Company entitled to vote are
exchanged, the Company shall give to the Participant, at the time of adoption of
the plan for liquidation, dissolution, sale, merger, consolidation or
reorganization, a reasonable time thereafter within which to exercise the
Option, including Shares as to which the Option would not be otherwise
exercisable, prior to the effectiveness of such liquidation, dissolution, sale,
merger, consolidation or reorganization, at the end of which time the Option
shall terminate, unless the outstanding Option is assumed or an equivalent
Option substituted by the successor corporation (or a parent or subsidiary of
the successor corporation) as described below.  In addition, except as otherwise
provided in an Award Agreement, unvested Shares subject to Restricted Stock and
Restricted Stock Unit Awards shall become fully vested immediately prior to the
date of such liquidation, dissolution, sale, merger, consolidation or
reorganization.  In connection with such transactions, an Award shall terminate
upon the consummation of the transaction unless the Award is assumed by the
successor or survivor corporation, or a parent or subsidiary thereof, or shall
be substituted for by similar awards covering the stock of the successor or
survivor corporation, or a parent or subsidiary thereof, with appropriate
adjustments as to the number and kind of shares and prices.

 

15.          Time of Granting Awards.

 

The date of grant of an Option pursuant to Section 5 shall, for all purposes, be
the date determined in accordance with Section 5 hereof.  The date of grant of
other Awards shall be the date on which the Board makes the determination
granting such Award.  Notice of the determination shall be given to each Outside
Director to whom an Award is so granted within a reasonable time after the date
of such grant.

 

16.          Amendment and Termination of the Plan.

 

(a)           Amendment and Termination.  The Board may amend or terminate the
Plan from time to time in such respects as the Board may deem advisable;
provided, that, to the extent necessary and desirable to comply with any
applicable law or regulation, the Company shall obtain approval of the
stockholders of the Company of Plan amendments to the extent and in the manner
required by such law or regulation.

 

(b)           Effect of Amendment or Termination.  Any such amendment or
termination of the Plan that would impair the rights of any Participant shall
not affect Awards already granted to such Participant and such Awards shall
remain in full force and effect as if this Plan had not been amended or
terminated, unless mutually agreed otherwise between the Participant and the
Board, which agreement must be in writing and signed by the Participant and the
Company.

 

17.          Conditions Upon Issuance of Shares.

 

Shares shall not be issued pursuant to an Award unless the issuance and delivery
of such Shares pursuant thereto shall comply with all relevant provisions of
law, including, without limitation, the Securities Act of 1933, as amended, the
Exchange Act, the rules and regulations promulgated thereunder, state securities
laws, and the requirements of any stock exchange upon which the Shares may then
be listed, and shall be further subject to the approval of counsel for the
Company with respect to such compliance.  As a condition to the issuance of
Shares pursuant to an Award, the Company may require the person acquiring such
Shares to represent and warrant at the time of any such exercise that the Shares
are being purchased only for investment and without any present intention

 

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to sell or distribute such Shares, if, in the opinion of counsel for the
Company, such a representation is required by any of the aforementioned relevant
provisions of law.

 

18.          Reservation of Shares.

 

The Company, during the term of this Plan, will at all times reserve and keep
available such number of Shares as shall be sufficient to satisfy the
requirements of the Plan. Inability of the Company to obtain authority from any
regulatory body having jurisdiction, which authority is deemed by the Company’s
counsel to be necessary to the lawful issuance and sale of any Shares hereunder,
shall relieve the Company of any liability in respect of the failure to issue or
sell such Shares as to which such requisite authority shall not have been
obtained.

 

19.          Award Agreement.

 

Awards shall be evidenced by Award Agreements in such form as the Board shall
approve.

 

20.          Stockholder Approval.

 

The Plan will be submitted for the approval of the Company’s stockholders within
twelve (12) months after the date of the Board’s initial adoption of the Plan. 
Awards may be granted or awarded prior to such stockholder approval, provided
that such Awards shall not be exercisable, shall not vest and the restrictions
thereon shall not lapse prior to the time when the Plan is approved by the
stockholders, and provided further that if such approval has not been obtained
at the end of said twelve-month period, all Awards previously granted or awarded
under the Plan shall thereupon be canceled and become null and void.

 

21.          Section 409A.

 

To the extent that the Board determines that any Award granted under the Plan is
subject to Section 409A of the Code, the Award Agreement evidencing such Award
shall incorporate the terms and conditions required by Section 409A of the
Code.  To the extent applicable, the Plan and Award Agreements shall be
interpreted in accordance with Section 409A of the Code and Department of
Treasury regulations and other interpretive guidance issued thereunder,
including, without limitation, any such regulations or other applicable guidance
that may be issued.  Notwithstanding any provision of the Plan to the contrary,
in the event that the Board determines that any Award may be subject to
Section 409A of the Code and related Department of Treasury guidance, the Board
may adopt such amendments to the Plan and the applicable Award Agreement (with
the consent of the Participant, to the extent required) or adopt other policies
and procedures (including amendments, policies and procedures with retroactive
effect), or take any other actions, that the Board determines are necessary or
appropriate to (a) exempt the Award from Section 409A of the Code and/or
preserve the intended tax treatment of the benefits provided with respect to the
Award, or (b) comply with the requirements of Section 409A of the Code and
related Department of Treasury guidance and thereby avoid the application of any
penalty taxes under such Section.

 

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