EXHIBIT 10.2
 

 
GERON CORPORATION
2006 DIRECTORS’ STOCK OPTION PLAN
(AS AMENDED AND RESTATED)
 
1.
Purposes of the Plan.

 
The purposes of this 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”.
 
2.
Definitions.

 
As used herein, the following definitions shall apply:
 

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

 

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

 

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

 

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

 

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

 

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

 

 
(g)
“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.

 

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

 

 
(i)
“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).

 

 
(j)
“Optioned Stock” shall mean the Common Stock subject to an Option.

 

 
(k)
“Optionee” shall mean an Outside Director who receives an Option.

 

 
(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.

 
 
 

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(n)
“Plan” shall mean this 2006 Directors’ Stock Option Plan, as may be amended from
time to time.

 

 
(o)
“Share” shall mean a share of the Common Stock, as adjusted in accordance with
Section 11 of the Plan.

 

 
(p)
“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 11 of the Plan, the maximum aggregate
number of Shares which may be optioned and sold under the Plan is 2,500,000
Shares (the “Pool”) of Common Stock. The Shares may be authorized, but unissued,
or reacquired Common Stock.
 
If an Option should expire or become unexercisable for any reason without having
been exercised in full, the unpurchased Shares which were subject thereto shall,
unless the Plan shall have been terminated, become available for future grant
under 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.
 
4.
Administration of and Grants of Options 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 hereunder shall be automatic and
non-discretionary and shall be made strictly in accordance with the following
provisions:

 

 
(i)
No person shall have any discretion to select which Outside Directors shall be
granted Options or to determine the number of Shares to be covered by Options
granted to Outside Directors.

 

 
(ii)
Each Outside Director shall be automatically granted an Option to purchase
45,000 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.

 

 
(iii)
Each Outside Director, other than the Chairman of the Board or 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 20,000 Shares (a “Subsequent Option”) on the date of the Annual Meeting
of the Company’s stockholders in each year of his service. The Subsequent Option
granted to the Chairman of the Board under this Section 4(b)(iii) shall be an
Option to purchase 40,000 Shares.

 
 
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(iv)
Each Outside Director who is appointed to serve on the Audit Committee, the
Compensation Committee, Nominating Committee or another standing committee of
the Board designated by the Board as qualifying for such grant, shall each be
automatically granted an Option to purchase 2,500 Shares (a “First Committee
Service Option”) on the date on which such person first is appointed to serve on
such standing committee.

 

 
(v)
Each Outside Director, other than the Chairman of the Audit Committee,
Compensation Committee, Nominating Committee or another so designated standing
committee of the Board or an Outside Director whose First Committee Service
Option is being granted on the date of the Annual Meeting of the Company’s
stockholders, who continues to serve on the Audit Committee, the Compensation
Committee, Nominating Committee or another so designated standing committee of
the Board, shall be automatically granted an Option to purchase 2,500 Shares (a
“Subsequent Committee Service Option”) on the date of the Annual Meeting of the
Company’s stockholders.

 

 
(vi)
Each Outside Director, who serves as a Chairman of the Audit Committee,
Compensation Committee or Nominating Committee or another standing committee of
the Board designated by the Board as qualifying for such grant, shall be
automatically granted an Option to purchase Shares (a “Committee Chair Service
Option”) on the date of the Annual Meeting of the Company’s stockholders. The
Committee Chair Service Option granted to the Audit Committee Chairman under
this Section 4(b)(vi) shall be an Option to purchase 10,000 Shares. The
Committee Chair Service Option granted to the Compensation Committee Chairman
and Nominating Committee Chairman under this Section 4(b)(vi) shall each be an
Option to purchase 5,000 Shares.

 

 
(vii)
Notwithstanding the provisions of subsections (ii), (iii), (iv), (v) and (vi)
hereof, in the event that a grant would cause the number of Shares subject to
outstanding Options plus the number of Shares previously purchased upon exercise
of Options 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 Option on
such date on the automatic grant date. 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 shareholders to increase the number of Shares
which may be issued under the Plan or through cancellation or expiration of
Options previously granted hereunder.

 

 
(viii)
The terms of each First Option granted hereunder shall be as follows:

 
 
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(1)
the First Option shall be exercisable only while the Outside Director remains a
Director of the Company, except as set forth in Section 9 hereof.

 

 
(2)
the exercise price per Share shall be 100% of the fair market value per Share on
the date of grant of the First Option, determined in accordance with Section 8
hereof.

 

 
(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.

 

 
(ix)
The terms of each Subsequent Option granted hereunder shall be as follows:

 

 
(1)
the Subsequent Option shall be exercisable only while the Outside Director
remains a Director of the Company, except as set forth in Section 9 hereof.

 

 
(2)
the exercise price per Share shall be 100% of the fair market value per Share on
the date of grant of the Subsequent Option, determined in accordance with
Section 8 hereof.

 

 
(3)
the Subsequent Option shall become exercisable as to one hundred percent (100%)
of the Shares subject to the Subsequent Option on the date of grant of the
Subsequent Option.

 

 
(x)
The terms of each First Committee Service Option granted hereunder shall be as
follows:

 

 
(1)
the First Committee Service Option shall be exercisable only while the Outside
Director remains a Director of the Company, except as set forth in Section 9
hereof.

 

 
(2)
the exercise price per Share shall be 100% of the fair market value per Share on
the date of grant of the First Committee Service Option, determined in
accordance with Section 8 hereof.

 

 
(3)
the First Committee Service Option shall become exercisable as to one hundred
percent (100%) of the Shares subject to the First Committee Service Option on
the date of grant of the First Committee Service Option.

 

 
(xi)
The terms of each Subsequent Committee Service Option granted hereunder shall be
as follows:

 
 
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(1)
the Subsequent Committee Service Option shall be exercisable only while the
Outside Director remains a Director of the Company, except as set forth in
Section 9 hereof.

 

 
(2)
the exercise price per Share shall be 100% of the fair market value per Share on
the date of grant of the Subsequent Committee Service Option, determined in
accordance with Section 8 hereof.

 

 
(3)
the Subsequent Committee Service Option shall become exercisable as to one
hundred percent (100%) of the Shares subject to the Subsequent Committee Service
Option on the date of grant of the Subsequent Committee Service Option.

 

 
(xii)
The terms of each Committee Chair Service Option granted hereunder shall be as
follows:

 

 
(1)
the Committee Chair Service Option shall be exercisable only while the Outside
Director remains a Director of the Company, except as set forth in Section 9
hereof.

 

 
(2)
the exercise price per Share shall be 100% of the fair market value per Share on
the date of grant of the Committee Chair Service Option, determined in
accordance with Section 8 hereof.

 

 
(3)
the Committee Chair Service Option shall become exercisable as to one hundred
percent (100%) of the Shares subject to the Committee Chair Service Option on
the date of grant of the Committee Chair Service Option.

 

 
(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 8(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 8(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 Option previously granted hereunder; and (vi) 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 Optionees and any other holders of
any Options granted under the Plan.

 

 
(e)
Suspension or Termination of Option. If the President or his or her designee
reasonably believes that an Optionee has committed an act of misconduct, the
President may suspend the Optionee’s right to exercise any option pending a
determination by the Board of Directors (excluding the Outside Director accused
of such misconduct). If the Board of Directors (excluding the Outside Director
accused of such misconduct) determines an Optionee has committed an act of
embezzlement, fraud, dishonesty, 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 an Optionee 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
Optionee nor his or her estate shall be entitled to exercise any option
whatsoever. In making such determination, the Board of Directors (excluding the
Outside Director accused of such misconduct) shall act fairly and shall give the
Optionee an opportunity to appear and present evidence on Optionee’s behalf at a
hearing before the Board or a committee of the Board.

 
 
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5.
Eligibility.

 
Options may be granted only to Outside Directors. All Options shall be
automatically granted in accordance with the terms set forth in Section 4(b)
hereof. An Outside Director who has been granted an Option may, if he or she is
otherwise eligible, be granted an additional Option or Options in accordance
with such provisions.
 
The Plan shall not confer upon any Optionee 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.
 
6.
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 15 of the Plan. No
Options may be issued under the Plan after the tenth (10th) anniversary of the
earlier of (i) the date upon which the Plan is adopted by the Board or (ii) the
date the Plan is approved by the stockholders.
 
7.
Term of Options.

 
The term of each Option shall be ten (10) years from the date of grant thereof.
 
8.
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 asked 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. With respect to any
Options granted hereunder concurrently with the initial effectiveness of the
Plan, the fair market value shall be the Price to Public as set forth in the
final prospectus relating to such initial public offering.

 
 
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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 six months), 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.

 
9.
Exercise of Option.

 

 
(a)
Procedure for Exercise; Rights as a Stockholder. Any Option granted hereunder
shall be exercisable at such times as are set forth in Section 4(b) hereof;
provided, however, that no Options shall be exercisable prior to stockholder
approval of the Plan in accordance with Section 17 hereof has been obtained.

 
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 8(c) of the Plan. 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 Optioned Stock, notwithstanding the exercise of the Option. A share
certificate for the number of Shares so acquired shall be issued to the Optionee
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 11 of the Plan.
 
 
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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.
 

 
(b)
Termination of Status as a Director. If an Outside Director ceases to serve as a
Director, he or she may, but only within ninety (90) days after 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 7 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.

 

 
(c)
Disability of Optionee. Notwithstanding Section 9(b) above, in the event a
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 Internal Revenue Code), he or she may, but only within
twenty-four (24) 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
Optionee 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 7 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 Optionee. In the event of the death of an Optionee:

 

 
(i)
During the term of the Option, if the Optionee 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 twenty-four (24) months following the date of death, by the Optionee’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 Optionee 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 7
has expired.

 

 
(ii)
Within three (3) months after the termination of Continuous Status as a
Director, the Option may be exercised, at any time within six (6) months
following the date of death, by the Optionee’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 had accrued at the date of termination.
Notwithstanding the foregoing, in no event may the option be exercised after its
term set forth in Section 7 has expired.

 
 
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10.
Nontransferability of Options.

 
The Option 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 an
Optionee does not constitute a transfer. An Option may be exercised during the
lifetime of an Optionee only by the Optionee or a transferee permitted by this
Section.
 
11.
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 Option, the
number of shares of Common Stock which have been authorized for issuance under
the Plan but as to which no Options have yet been granted or which have been
returned to the Plan upon cancellation or expiration of an Option, and the
number of shares of Common Stock to be granted under the provisions set forth in
Section 4 of the Plan, as well as the price per share of Common Stock covered by
each such outstanding Option, 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 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 Option.

 

 
(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 Eligible Director, 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.

 
 
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12.
Time of Granting Options.

 
The date of grant of an Option shall, for all purposes, be the date determined
in accordance with Section 4(b) hereof. Notice of the determination shall be
given to each Outside Director to whom an Option is so granted within a
reasonable time after the date of such grant.
 
13.
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 Optionee shall not affect Options
already granted to such Optionee and such Options shall remain in full force and
effect as if this Plan had not been amended or terminated, unless mutually
agreed otherwise between the Optionee and the Board, which agreement must be in
writing and signed by the Optionee and the Company.

 
14.
Conditions Upon Issuance of Shares.

 
Shares shall not be issued pursuant to the exercise of an Option unless the
exercise of such Option and 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 exercise of an Option, the Company may
require the person exercising such Option 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 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.
 
15.
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.
 
16.
Option Agreement.

 
 
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Options shall be evidenced by written option agreements in such form as the
Board shall approve.
 
17.
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.
Options may be granted or awarded prior to such stockholder approval, provided
that such Options 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 Options previously granted or
awarded under the Plan shall thereupon be canceled and become null and void.
 
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