10. Stock Option Plans

During 2002, BioTime adopted the 2002 Plan, which was amended during December 2004 to reserve 2,000,000 common shares for issuance under options granted to eligible persons. During October 2007 and August 2009, the Board of Directors approved amendments to the 2002 Plan to make an additional 4,000,000 common shares available under the 2002 Plan. The 2007 and 2009 amendments were approved by BioTime's shareholders in October 2009. No options may be granted under the 2002 Plan more than ten years after the date upon which the 2002 Plan was adopted by the Board of Directors, and no options granted under the 2002 Plan may be exercised after the expiration of ten years from the date of grant. Under the 2002 Plan, options to purchase common shares may be granted to employees, directors and certain consultants at prices not less than the fair market value at date of grant for incentive stock options and not less than 85% of fair market value for other stock options. Options may be fully exercisable immediately, or may be exercisable according to a schedule or conditions specified by the Board of Directors or the Compensation Committee. The 2002 Plan also permits BioTime to sell common shares to employees subject to vesting provisions under restricted stock agreements that entitle BioTime to repurchase unvested shares at the employee's cost upon the occurrence of specified events, such as termination of employment. BioTime may permit employees or consultants, but not executive officers or directors, who purchase stock under restricted stock purchase agreements, to pay for their shares by delivering a promissory note that is secured by a pledge of their shares. Under the 2002 Plan, as of December 31, 2011, BioTime had granted to certain employees, consultants, and directors, options to purchase a total of 3,408,905 common shares at exercise prices ranging from $0.5 to $8.58 per share.

In October 2007, BioTime granted certain executives options to purchase 2,000,000 common shares (“Executive Options”) under BioTime's 2002 Employee Stock Option Plan, as amended (“2002 Plan”). The exercise price of the Executive Options is $0.50 per share. The Executive Options will vest at the rate of 1/60th of the number of Executive Options granted at the end of each full month of employment. The vested portion of each executive's Executive Options shall expire on the earliest of (a) seven (7) years from the date of grant, (b) three months after the executive ceases to be an employee of BioTime for any reason other than his death or disability, or (c) one year after he ceases to be an employee of BioTime due to his death or disability; provided that if he dies during the three-month period described in clause (b), the expiration date of the vested portion of this Option shall be one year after the date of his death.

The Executive Options were originally paired with stock appreciation rights ("SARs") with respect to 1,032,030 shares. The SARs expired during October 2009, under their terms, when BioTime's shareholders approved an amendment to the 2002 Plan making additional common shares available under the 2002 Plan.

On January 1, 2006, BioTime adopted a new accounting pronouncement, which requires the measurement and recognition for all share-based payment awards made to BioTime's employees and directors, including employee stock options. The following table summarizes stock-based compensation expense related to employee and director stock options awards for the years ended December 31, 2011, 2010, and 2009, which was allocated as follows:

	Year Ended December 31,
	2011		2010		2009
All stock-based compensation expense:
Research and Development	$	885,581	$	473,893	$	150,899
General and Administrative		916,832		619,838		337,665
Stock appreciation rights/(reversal)		-		-		(483,688	)
All stock-based compensation expense included in expenses	$	1,802,413	$	1,093,731	$	4,876

BioTime adopted a new accounting pronouncement using the modified prospective transition method of accounting for options granted on or after January 1, 2006. As of December 31, 2011, total unrecognized compensation costs related to unvested stock options was $3,567,312, which is expected to be recognized as expense over a weighted average period of approximately 4.9 years.

For all applicable periods, the value of each employee or director stock option was estimated on the date of grant using the Black-Scholes Merton model for the purpose of the pro forma financial disclosures in accordance with a new accounting pronouncement.

The weighted-average estimated fair value of stock options granted during the years ended December 31, 2011 and 2010 was $4.89 and $6.75 per share, respectively, using the Black-Scholes Merton model with the following weighted-average assumptions:

	Year EndedDecember 31,
	2011			2010

Expected life (in years)		6.46			5.92
Risk-free interest rates		1.9	%		2.05	%
Volatility		106.5	%		112.85	%
Dividend yield		0	%		0	%

General Option Information

A summary of all option activity under the 1992 Plan and 2002 Plan for the years ended December 31, 2011, 2010, and 2009 is as follows:

	Options Available for Grant			Number of Options Outstanding			Weighted Average Exercise Price
January 1, 2009		746,168			3,288,332			0.97
Added by Amendment to 2002 Plan 2		2,000,000			-			-
Granted		(699,000	)		699,000			3.28
Exercised 1		-			(410,832	)		1.73
Forfeited/expired		40,000			(99,500	)		1.13
December 31, 2009		2,087,168			3,477,000			1.13
Granted		(245,000	)		245,000			6.75
Exercised 1					(401,410	)		1.56
December 31, 2010		1,842,168			3,320,590			1.13
Granted		(560,443	)		560,443			4.89
Exercised 1		-			(450,660	)		0.50
Forfeited/expired		21,468			(21,468	)		5.60
December 31, 2011		1,303,193			3,408,905		$	2.18

1 This table excludes 250,000 options which were granted in 2008 outside the 1992 Plan and 2002 Plan, of which 125,000 were exercised in 2009 and the remaining 125,000 in 2010.

2 During October 2009, the 2002 Plan was amended to make 2,000,000 additional common shares available for the grant of options.

Additional information regarding options outstanding as of December 31, 2011 is as follows:

			Options Outstanding				Options Exercisable

Range of Exercise Prices	Number Outstanding		Weighted Avg. Remaining Contractual Life		Weighted Avg. Exercise Price		Number Exercisable		Weighted Avg. Exercise Price
			(years)
$0.50		1,970,400		2.78		0.50		1,637,067		0.50
0.74		20,000		2.42		0.74		20,000		0.74
2.30-8.58		1,418,505		4.99		4.53		718,983		4.14
$0.50-$8.58		3,408,905		3.70	$	2.18		2,376,050	$	1.60

During 2011, BioTime's subsidiary, LifeMap adopted a stock option plan that has substantially the same operative provisions as the BioTime 2002 Stock Option Plan. The LifeMap stock option plan authorizes the sale of up to 8,000,000 shares of its common stock through the exercise of stock options or under restricted stock purchase agreements.

During 2010, BioTime's subsidiaries OncoCyte, OrthoCyte, ReCyte Therapeutics, and BioTime Asia adopted stock options plans that have substantially the same operative provisions as the BioTime 2002 Stock Option Plan. The OncoCyte, OrthoCyte and ReCyte Therapeutics stock option plans each authorize the sale of up to 4,000,000 shares of the applicable subsidiary's common stock through the exercise of stock options or under restricted stock purchase agreements. The BioTime Asia stock option plan authorizes the sale of up to 1,600 ordinary shares through the exercise of stock options or under restricted stock purchase agreements. Cell Cure Neurosciences' option plan authorizes the sale of 14,100 ordinary shares through the exercise of stock options.

			Options Outstanding				Options Exercisable

Range of Exercise Prices	Number Outstanding		Weighted Avg. Remaining Contractual Life		Weighted Avg. Exercise Price		Number Exercisable		Weighted Avg. Exercise Price
			(years)
$0.003-$0.10		7,209,800		7.39	$	0.27		1,976,075	$	0.24
1.00		530,000		6.34		1.00		4,167		1.00
2.05		1,050,000		8.89		2.05		252,083		2.05
27.00-42.02		7,840		8.80		37.35		2,613		32.02
$0.003-$42.02		8,797,640		7.51	$	0.56		2,234,938	$	0.48

No other options were granted under the other subsidiary Stock Option Plans as of December 31, 2011.