10. Stock Option Plans

During 2002, BioTime adopted the 2002 Employee Stock Option Plan (the “2002 Plan”), which was amended in 2004, 2007, and 2009 to reserve additional common shares for issuance under options or restricted stock awards granted to eligible persons. The 2002 Plan expired during September 2012 and no additional grants of options or awards of restricted stock may be made under the 2002 Plan.

During December 2012, BioTime’s Board of Directors approved the 2012 Equity Incentive Plan (the “2012 Plan”) under which BioTime has reserved 4,000,000 common shares for the grant of stock options or the sale of restricted stock. No options may be granted under the 2012 Plan more than ten years after the date upon which the 2012 Plan was adopted by the Board of Directors, and no options granted under the 2012 Plan may be exercised after the expiration of ten years from the date of grant. Under the 2012 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, subject to certain limited exceptions for options granted in substitution of other 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 2012 Plan also permits BioTime to award restricted stock for services rendered or to sell common shares to employees subject to vesting provisions under restricted stock agreements that provide for forfeiture of unvested shares upon the occurrence of specified events under a restricted stock award agreement. BioTime may permit employees or consultants, but not 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.

BioTime may also grant stock appreciation rights (“SARs”) and hypothetical units issued with reference to BioTime common shares (“Restricted Stock Units”) under the Plan. An SAR is the right to receive, upon exercise, an amount payable in cash or shares or a combination of shares and cash, as determined by the Board of Directors or the Compensation Committee, equal to the number of shares subject to the SAR that is being exercised multiplied by the excess of (a) the fair market value of a BioTime common share on the date the SAR is exercised, over (b) the exercise price specified in the SAR Award agreement.

The terms and conditions of a grant of Restricted Stock Units will be determined by the Board of Directors or Compensation Committee. No shares of stock will be issued at the time a Restricted Stock Unit is granted, and BioTime will not be required to set aside a fund for the payment of any such award. A recipient of Restricted Stock Units will have no voting rights with respect to the Restricted Stock Units. Upon the expiration of the restrictions applicable to a Restricted Stock Unit, BioTime will either issue to the recipient, without charge, one common share per Restricted Stock Unit or cash in an amount equal to the fair market value of one common share.

The following table summarizes stock-based compensation expense related to employee and director stock options awards for the years ended December 31, 2014, 2013, and 2012, which was allocated as follows:

	Year Ended December 31,
All stock-based compensation expense:	2014		2013		2012
Research and Development	$	1,309,703	$	829,938	$	815,052
General and Administrative		3,145,717		2,214,836		1,028,910
All stock-based compensation expense included in expenses	$	4,455,420	$	3,044,774	$	1,843,962

As of December 31, 2014, total unrecognized compensation costs related to unvested stock options was $8,388,639, which is expected to be recognized as expense over a weighted average period of approximately 6.93 years.

The table above does not include $173,100 of stock-based compensation to a consultant in 2013.

The weighted-average estimated fair value of stock options granted during the years ended December 31, 2014 and 2013 was $3.43 and $4.13 per share respectively, using the Black-Scholes Merton model with the following weighted-average assumptions:

	Year Ended December 31,
	2014			2013
Expected life (in years)		6.67			6.68
Risk-free interest rates		2.19	%		1.51	%
Volatility		83.20	%		95.22	%
Dividend yield		0	%		0	%

General Option Information

A summary of all option activity under the 2002 Plan and the 2012 Plan for the years ended December 31, 2014 and 2013 is as follows:

	Options Available for Grant			Number of Options Outstanding			Weighted Average Exercise Price
January 1, 2013		3,745,000			3,681,301		$	1.96
Granted under 2012 Plan		(1,585,000	)		1,585,000			4.13
Exercised		-			(20,000	)		2.30
Forfeited/expired under 2002 Plan		-			(524,166	)		4.01
Forfeited/expired under 2012 Plan		155,000			(155,000	)		4.18
December 31, 2013		2,315,000			4,567,135		$	2.71
Granted under 2012 Plan		(2,170,000	)		2,170,000			3.54
Exercised		-			(2,060,400	)		0.58
Forfeited/expired under 2002 Plan		-			(179,491	)		4.32
Forfeited/expired under 2012 Plan		522,918			(522,918	)		3.72
December 31, 2014		667,918			3,974,326		$	4.04

Additional information regarding options outstanding as of December 31, 2014 is as follows:

		Options Outstanding					Options Exercisable

Range of Exercise Prices	Number Outstanding		Weighted Avg. Remaining Contractual Life (years)		Weighted Avg. Exercise Price			Number Exercisable	Weighted Avg. Exercise Price
2.52-8.58	3,974,326			5.57	$	4.04		1,716,099	$	4.48
$2.52-8.58	3,974,326			5.57	$	4.04		1,716,099	$	4.48

Subsidiary Stock Option Plans

During 2013 Asterias adopted an Equity Incentive Plan that has substantially the same operative provisions as BioTime’s 2012 Plan except that it permits the sale or grant of up to 4,500,000 shares of Asterias common stock.

During 2011, BioTime’s subsidiary, LifeMap Sciences adopted a stock option plan that has substantially the same operative provisions as the BioTime 2002 Stock Option Plan. The LifeMap Sciences stock option plan authorized 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 2012, the LifeMap Sciences stock option plan was amended to reflect a 1 for 4 reverse stock split and a change in plan. As a result, the total number of shares that may be issued under the plan was adjusted to 1,842,168.

During 2010, BioTime’s subsidiaries OncoCyte, OrthoCyte, ReCyte Therapeutics, and BioTime Asia adopted stock option 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.

During 2013, BioTime’s subsidiary, LifeMap Solutions adopted a stock option plan that has substantially the same operative provisions as the BioTime 2002 Stock Option Plan. The LifeMap Sciences stock option plan authorized the sale of up to 18,667 shares of its common stock through the exercise of stock options or under restricted stock purchase agreements.

		Subsidiary Options Outstanding					Options Exercisable

Range of Exercise Prices	Number Outstanding		Weighted Avg. Remaining Contractual Life (years)		Weighted Avg. Exercise Price			Number Exercisable	Weighted Avg. Exercise Price
$0.003-$0.75	5,256,226			4.96	$	0.36		5,091,506	$	0.37
1.00-1.75	1,986,772			4.87		1.58		1,157,886		1.50
2.05-2.34	4,361,666			5.53		2.26		2,066,146		2.18
3.88-6.25	75,000			0.12		0.105		2,708		0.01
27.00-42.02	7,840			5.80		37.35		7,840		37.35
500.00	13,167			0.04		3.31		1,993		0.86
$0.003-$500.00	11,700,671			5.17	$	1.90		8,328,079	$	1.13