Exhibit 10.51991 INDEPENDENT DIRECTORS’ STOCK OPTION PLAN, AS AMENDED     1. Purpose and Persons Covered. The purpose of the 1991 IndependentDirectors’ Stock Option Plan, as amended, of Osteotech, Inc. is to providecompensation to Independent Directors for joining and serving on the Board.     2. Definitions. (a) “Affiliate” shall have the meaning set forth in Rule 405 under theSecurities Act of 1933.  (b) “Board” shall mean the Board of Directors of the Company.  (c) “Change of Control” shall mean: (i) a “Board Change” which, for purposes of this Agreement, shallhave occurred if a majority of the seats (not counting vacantseats) on the Board were to be occupied by individuals who wereneither (A) nominated by a majority of the Incumbent Directorsnor (B) appointed by directors who were originally nominated bya majority of the Incumbent Directors. An “Incumbent Director”is a member of the Board who has been either (A) nominated by amajority of the directors of the Company then in office or (B)appointed by directors who were nominated by a majority of thedirectors of the Company then in office, but excluding, for thispurpose, any such individual whose initial assumption of officeoccurs as a result of either an actual or threatened electioncontest (as such terms are used in Rule 14a-11 of Regulation 14Apromulgated under the Securities Exchange Act of 1934, asamended (the “Exchange Act”)) or other actual or threatenedsolicitation of proxies or consents by or on behalf of a personother than the Board; or (1) The Osteotech, Inc. 1991 Independent Directors’ Stock Option Plan, asamended, was amended by the Board on October 22, 1992 and such amendmentwas approved by the Stockholders on June 24, 1993; further amendments notrequiring Stockholder approval were approved by the Board on October 28,1993; and further amendments were adopted by the Board on January 25, 1996and approved by the Stockholders on June 6, 1996.
 

 
 (ii) the acquisition by any individual, entity or group (within themeaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a“Person”) of beneficial ownership (within the meaning of Rule13d-3 promulgated under the Exchange Act) of a majority of thethen outstanding voting securities of the Company (the“Outstanding Company Voting Securities”); provided, however,that the following acquisitions shall not constitute a Change ofControl: (A) any acquisition by the Company, (B) any acquisitionby any employee benefit plan (or related trust) sponsored ormaintained by the Company or any corporation controlled by theCompany or (C) any public offering or private placement by theCompany of its voting securities; or  (iii) a merger or consolidation of the Company with another entitythat prior to the merger or consolidation was not a subsidiaryof the Company, where the Company shall not be the survivingentity (a “Non-Surviving Merger”); or  (iv) a merger or consolidation of the Company with another entitythat prior to the merger or consolidation was not a subsidiaryof the Company where the Company shall be the surviving entity,but which results in the acquisition by a Person of a majorityof the Outstanding Company Voting Securities; or  (v) a voluntary or involuntary liquidation of the Company (a“Liquidation”); or  (vi) a sale or disposition by the Company of at least 80% of itsassets in a single transaction or a series of transactions(other than a sale or disposition of assets to a subsidiary ofthe Company in a transaction not otherwise involving a Change ofControl of the Company or a change in control (as defined hereinwith respect to the Company) of such subsidiary). (d) “Code” shall mean the Internal Revenue Code of 1986, as amended.  (e) “Common Stock” shall mean the $.01 par value Common Stock of theCompany.  (f) “Company” shall mean Osteotech, Inc., a Delaware corporation.  (g) “Disability” shall mean the condition of a member of the Board who isunable to engage in any substantial gainful activity by reason of anymedically determinable physical or mental impairment which can beexpected to result in death or which has lasted or can be expected tolast for a continuous period of not less than twelve (12) months, allwithin the meaning of Section 105(d)(4) of the Code.  (h) “Exercise Price” shall mean the price per Share of Common Stock atwhich an Option may be exercised.
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 (i) “Fair Market Value” of a Share of Common Stock as of a specified dateshall mean the closing price of a Share on the principal securitiesexchange on which such Shares are traded on the day immediatelypreceding the date as of which Fair Market Value is being determined,or on the next preceding date on which such Shares are traded if noShares were traded on such immediately preceding day, or if the Sharesare not traded on a securities exchange, Fair Market Value shall bedeemed to be the average of the high bid and low asked prices of theShares in the over-the-counter market on the day immediately precedingthe date as of which Fair Market Value is being determined or on thenext preceding date on which such high bid and low asked prices wererecorded. If the Shares are not publicly traded, Fair Market Valueshall be determined by a nationally-recognized investment banking firmretained by the Board.  (j) “Independent Directors” shall mean members of the Board who are notofficers and/or employees of the Company.  (k) “Option” shall mean a stock option granted pursuant to the Plan, whichoption shall not be an Incentive Stock Option described in Code Section422(A)(b).  (l) “Optionee” shall mean a person to whom an Option has been granted.  (m) “Plan” shall mean this Osteotech, Inc. 1991 Independent Directors’Stock Option Plan, as amended.  (n) “Purchase Price” shall mean the Exercise Price multiplied by the numberof whole Shares with respect to which an Option is exercised.  (o) “Share” shall mean one share of Common Stock.     3. Effective Date. This Plan was approved by the Board effective September13, 1991 (the “Effective Date”).     4. Grant of Options. (a) Initial Grant. On the date each Independent Director is elected to theBoard such Independent Director shall be granted 10,000 Options.  (b) Subsequent Grants. Upon each annual re-election of each IndependentDirector to the Board by the Stockholders of the Company, suchIndependent Director shall be granted 7,500 Options, provided suchIndependent Director has served continuously on the Board during thepreceding year, and further provided that such Independent Director’sinitial election to the Board did not occur within six months prior tosuch annual re-election. Upon an Independent Director’s initialelection as Chairman of the Board, such Independent Director shallreceive a one-time grant of 100,000 Options, in lieu of the grantsdescribed in the preceding sentence and in Paragraph 4(a) above.  (c) Elections not to receive. Notwithstanding the foregoing, an IndependentDirector may irrevocably elect not to receive Options which he wouldotherwise receive pursuant to subsections (a) or (b) hereof bydelivering written notice to the Board at least six (6) months inadvance of the date such Options would otherwise be granted; providedthat such Independent Director may receive nothing of value in lieu ofsuch grant.
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     5. Stock. The stock subject to Options granted under the Plan shall beShares of authorized but unissued or reacquired Common Stock. The aggregatenumber of Shares which may be issued under Options exercised under this Planshall not exceed 500,000. The number of Shares subject to Options outstandingunder the Plan at any time may not exceed the number of Shares remainingavailable for issuance under the Plan. In the event that any Optionoutstandingunder the Plan expires for any reason or is terminated, the Shares allocable tothe unexercised portion of such Option may again be subjected to an Option underthe Plan.     The limitations established by this Section 5 shall be subject toadjustment upon the occurrence of the events specified and in the mannerprovided in Section 8 hereof.     6. Terms and Conditions of Options. Options granted pursuant to the Planshall be evidenced by written agreements in the form attached hereto as ExhibitA which agreements shall comply with and be subject to the following terms andconditions: (a) Date of Grant. Each Option shall specify its effective date (the “dateof grant”), which shall be the date the Option is granted in accordancewith Section 4 hereof.  (b) Number of Shares. Each Option shall state the number of Shares to whichit pertains as specified by Section 4 hereof and shall provide for theadjustment thereof in accordance with the provisions of Section 8hereof.  (c) Exercise Price. Each Option shall state the Exercise Price, which priceshall be the greater of: (i) the par value or (ii) the Fair MarketValue, of the Shares to which the Option relates on the date of grant.  (d) Exercise of Options and Medium and Time of Payment. To exercise anOption, the Optionee shall give written notice to the Companyspecifying the number of Shares to be purchased and accompanied bypayment in cash or by certified check of the full Purchase Pricetherefor, provided, however, that, with respect to any option grantedon or subsequent to July 1, 1997, an Optionee may, in lieu of thepayment of the Purchase Price in cash or by certified check, surrenderto the Company as payment of the Purchase Price of the Option, thatnumber of Shares of Common Stock issuable upon exercise of the Option,with an aggregate Fair Market Value equivalent to the aggregatePurchase Price of the Option being exercised. No Shares shall beissueduntil full payment therefor has been made in accordance herewith.  (e) Term and Exercise of Options; Nontransferability of Options. (i) Options granted prior to July 1, 1997. Options are notexercisable for a period of one (1) year following the date ofgrant. The Options shall thereafter be exercisable as follows:25% of the Options will become exercisable on the firstanniversary of the date of grant; 25% of the Options will becomeexercisable on the second anniversary of the date of grant; 25%of the Options will become exercisable on the third anniversaryof the date of grant; and the remaining 25% of the Options will
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   become exercisable on the fourth anniversary of the date theOptions become exercisable. The Options shall expire and nolonger be exercisable as of 5:00 p.m. local time at the locationof the Company’s principal executive offices (“local time”) onthe fifth anniversary of the date the Options becomeexercisable. During the lifetime of the Optionee, the Optionshall be exercisable only by the Optionee and shall not beassignable or transferable. In the event of the Optionee’sdeath, no Option shall be transferable by the Optionee otherwisethan by will or by the laws of descent and distribution. (ii) Options granted on or subsequent to July 1, 1997. Options vestand become exercisable in their entirety one (1) year followingthe date of grant. The Options shall expire and no longer beexercisable as of 5:00 p.m. local time at the location of theCompany’s principal executive offices (“local time”) on thetenth anniversary of the date of grant. During the lifetime ofthe Optionee, the Option shall be exercisable only by theOptionee and shall not be assignable or transferable. In theevent of the Optionee’s death, no Option shall be transferableby the Optionee otherwise than by will or by the laws of descentand distribution. (f) Effect of Change of Control on Options. (i) Options granted prior to July 1, 1997. Subject to any requiredaction by the stockholders of the Company, if the Company shallbe the surviving corporation in any merger or consolidation,each outstanding Option shall pertain and apply to thesecurities to which a holder of the number of Shares subject tothe Option would have been entitled in such merger orconsolidation. A dissolution or Liquidation of the Company or amerger or consolidation in which the Company is not thesurviving corporation shall cause each outstanding Option toterminate, unless the agreement of merger or consolidation shallotherwise provide, provided that each Optionee shall, in suchevent, have the right immediately prior to such dissolution orLiquidation, or merger or consolidation in which the Company isnot the surviving corporation, if a period of one (1) year fromthe date of the grant of the Option shall have elapsed, toexercise the Option, in whole or in part, whether or not theOptionee’s right to exercise such Option has otherwise accruedpursuant to Section 6(e) of the Plan.  (ii) Options granted on or subsequent to July 1, 1997. Subject to anyrequired action by the stockholders of the Company, if theCompany shall be the surviving corporation in any merger orconsolidation, each outstanding Option shall pertain and applyto the securities to which a holder of the number of Sharessubject to the Option would have been entitled in such merger orconsolidation. Notwithstanding anything to the contrarycontained in the Option certificates or this Plan, the Options,whether or not vested or earned at the time of any Change ofControl, shall immediately vest and become exercisable in
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   accordance with their terms effective upon a Change of Control,provided however that, in the case of a Non-Surviving Merger orLiquidation, (A) such Options shall vest and become exercisablein their entirety immediately prior to the effectiveness of suchNon-Surviving Merger or Liquidation, (B) such Optionee shall begiven the opportunity to exercise the Options prior to theeffectiveness of such Non-Surviving Merger or Liquidation and(C) such Options shall terminate in their entirety to the extentnot previously exercised upon the effectiveness of suchNon-Surviving Merger or Liquidation. (g) Termination. (i) Options granted prior to July 1, 1997. Notwithstanding anything tothe contrary contained herein the Options shall expire and nolonger be exercisable as of 5:00 p.m. local time on (i) the daythe Independent Director is removed from the Board for cause inaccordance with the Company’s certificate of incorporation andby-laws and the Delaware General Corporation Law; (ii) theninetieth (90th) day after the Independent Director (A)voluntarily resigns from the Board (except as a result of theDisability of such Independent Director), (B) is removed from theBoard without cause in accordance with the Company’s certificateof incorporation and by-laws and the Delaware General CorporationLaw or (C) loses an election to the Board; or the (iii) firstanniversary of the date the Independent Director leaves the Boarddue to his or her death or Disability.  (ii) Options granted on or subsequent to July 1, 1997. Notwithstandinganything to the contrary contained herein the Options shall expireand no longer be exercisable as of 5:00 p.m. local time on (i) theday the Independent Director is removed from the Board forcausein accordance with the Company’s certificate of incorporation andby-laws and the Delaware General Corporation Law, or, (ii) in theevent that the Independent Director (A) voluntarily resigns fromthe Board, (B) is removed from the Board without cause inaccordance with the Company’s certificate of incorporation andby-laws and the Delaware General Corporation Law, (C) loses anelection to the Board or (D) leaves the Board due to his or herdeath or Disability, the Option shall be exercisable for thelesser of the term remaining for exercise of the Option or five(5) years after the original date the Independent Director ceasesto be a member of the Board. (h) Rights as a Stockholder. An Optionee or a transferee of a deceasedOptionee shall have no rights as a stockholder with respect to anyShares covered by his or her Option until the date of the issuance of astock certificate for such Shares. No adjustment shall be made fordividends (ordinary or extraordinary, whether in cash, securities orother property) or distributions or other rights for which the recorddate is prior to the date such stock certificate is issued, except asprovided in Section 8 hereof.     7. Term of Plan. Options may be granted pursuant to the Plan until 5:00p.m. local time on September 12, 2001.
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     8. Recapitalization. Subject to any required action by the stockholders,the number of Shares covered by this Plan as provided in Section 5, the numberof Shares covered by each outstanding Option, and the Exercise Price thereofshall be proportionately adjusted for any increase or decrease in the number ofissued and outstanding Shares resulting from a subdivision or consolidation ofShares, stock split, or the payment of a stock dividend.     In the event of a change in the Common Stock as presently constituted,which is limited to a change of all of the Company’s authorized shares with parvalue into the same number of shares with a different par value or withoutparvalue, the shares resulting from any such change shall be deemed to be Shares ofCommon Stock within the meaning of the Plan.     Except as hereinbefore expressly provided in Section 6 or this Section 8,the Optionee shall have no rights by reason of any subdivision or consolidationof shares of stock of any class, stock split, or the payment of any stockdividend or any other increase or decrease in the number of shares of stock ofany class or by reason of any dissolution, Liquidation, merger, or consolidationor spin-off of assets or stock of another corporation, and any issue by theCompany of shares of stock of any class or securities convertible into shares ofstock of any class, shall not affect, and no adjustment by reason thereof shallbe made with respect to, the number or price of Shares subject to the Option.     The grant of an Option pursuant to the Plan shall not affect in any way theright or power of the Company to make adjustments, reclassifications,reorganizations or changes of its capital or business structure or to merge orconsolidate or to dissolve, liquidate, sell or transfer all or any part of itsbusiness or assets.     9. Securities Law Requirements. No Shares shall be issued upon the exerciseof any Option unless and until the Company has determined that: (i) it and theOptionee have taken all actions required to register the Shares under theSecurities Act of 1933 or perfect an exemption from the registrationrequirements thereof; (ii) any applicable listing requirement of any stockexchange on which the Common Stock are listed has been satisfied; and (iii) anyother applicable provision of state or Federal law has been satisfied.     10. Amendment of the Plan. The Board may, insofar as permitted by law, fromtime to time, with respect to any Shares at the time not subject to Options,suspend or discontinue the Plan or revise or amend it in any respect whatsoeverexcept that (i) the provisions of Section 4 of the Plan may not be amended morethan once every six (6) months and (ii) without the approval of the stockholdersof the Company, no such revision or amendment shall: (a) Increase the number of Shares subject to the Plan:  (b) Materially modify the requirements as to eligibility for participationin the Plan;  (c) Materially increase the benefits accruing to participants under thePlan; or  (d) Amend this Section 10 to defeat its purpose.     11. Application of Funds. The proceeds received by the Company from thesale of Common Stock pursuant to the exercise of an Option will be used forgeneral corporate purposes.
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     12. No Obligation to Exercise Option. The granting of an Option shallimpose no obligation upon the Optionee to exercise such Option.     13. Withholding. Whenever Shares are to be delivered upon exercise of anOption, the Company shall be entitled to require as a condition of delivery thatthe Optionee remit to the Company an amount sufficient to satisfy the Company’sfederal, state and local withholding tax obligations with respect to theexercise of the Option.     14. Governing Law. The provisions of this Plan shall be governed andconstrued in accordance with the laws of the State of New Jersey.     15. Stockholder Approval. The Plan, and all Options granted hereunder fromthe Effective Date through the date the Company’s stockholders approve the Plan,shall be subject to approval and ratification by the Company’s stockholders. ThePlan shall be submitted to the Company’s stockholders at the next annual meetingthereof held after the Effective Date.
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