As
filed
with the Securities and Exchange Commission on December 18,
2006
Registration
No. 333-136728
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
_________________
FORM
S-8
Amendment
No. 1
REGISTRATION
STATEMENT
under
THE
SECURITIES ACT OF 1933
_________________
ISORAY,
INC.
(Exact
name of Registrant as specified in its charter)
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Minnesota
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41-1458152
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(State
or other jurisdiction of
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(I.R.S.
Employer Identification No.)
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incorporation
or organization)
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350
Hills Street, Suite 106
Richland,
Washington 99354
(Address
of principal executive offices)
_________________
Amended
and Restated 2006 Director Stock Option Plan
(Full
title of the Plan)
_________________
Roger
Girard
Chief
Executive Officer
IsoRay,
Inc.
350
Hills Street, Suite 106
Richland,
Washington 99354
(509)
375-1202
(Name,
address and telephone number, including area code, of agent for
service)
_________________
Copy
to:
Stephen
R. Boatwright, Esq.
Alicia
M. Corbett, Esq.
Keller
Rohrback, P.L.C.
3101
North Central Avenue, Suite 900
Phoenix,
Arizona 85012-2600
(602)
248-0088
CALCULATION
OF REGISTRATION FEE
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Title
of Securities to be Registered
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Maximum
Amount
to
be
Registered
(1)
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Proposed
Maximum
Offering
Price Per
Share
(2)
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Proposed
Maximum
Aggregate
Offering
Price
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Amount
of
Registration
Fee
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Amended
and Restated 2006 Director Stock
Option
Plan
Common
Stock,
$0.001
par value
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1,000,000
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$3.05
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$3,050,000
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$326.35
(3)
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_________________
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(1)
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This
Registration Statement shall also cover any additional shares of
common
stock which become issuable under the Plan by reason of any stock
divided,
stock split, recapitalization or any other similar transaction effected
without the receipt of consideration which results in an increase
in the
number of the Registrant's outstanding shares of Common
Stock.
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(2)
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Estimated
in accordance with Rule 457(h) under the Securities Act of 1933 (the
“Securities Act”) solely for the purpose of calculating the registration
fee. The computation is based on the average of the bid and asked
prices
of the Registrant’s common stock on August 16,
2006.
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PART
II
INFORMATION
REQUIRED IN THE REGISTRATION STATEMENT
Item
3. Incorporation of Documents by Reference.
The
Securities and Exchange Commission (the "Commission") requires us to
"incorporate by reference" certain of our publicly-filed documents into this
prospectus, which means that information included in those documents is
considered part of this prospectus. Information that we file with the Commission
after the effective date of this prospectus will automatically update and
supersede this information. We incorporate by reference the documents listed
below and any future filings made with the Commission under Sections 13(a),
13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended, (the
"Exchange Act"), until we terminate the effectiveness of this registration
statement.
The
following documents filed with the Commission are hereby incorporated by
reference:
(a)
Our
Annual Report on Form 10-KSB for the fiscal year ended June 30, 2006 (filed
September 28, 2006), which contains audited financial statements for our
latest
fiscal year for which such statements have been filed.
(b)
Our
Quarterly Report on Form 10-QSB for the fiscal quarter ended September 30,
2006
(filed November 14, 2006).
(c)
Our
Current Reports on Form 8-K filed on August 10, 2006, August 18, 2006, September
8, 2006 and November 6, 2006.
(d)
The
description of our common stock contained in our Registration Statement on
Form
SB-2, filed with the Commission on October 16, 2006, including any amendments
or
reports filed for the purpose of updating such description.
We
will
furnish without charge to you, on written or oral request, a copy of any
or all
of the documents incorporated by reference, other than exhibits to those
documents. You should direct any requests for documents to Jonathan Hunt,
Chief
Financial Officer, IsoRay, Inc., 350 Hills Street, Suite 106, Richland,
Washington 99354.
Item
4. Description of Securities.
Not
applicable.
Item
5. Interests of Named Experts and Counsel.
Keller
Rohrback, PLC, Phoenix, Arizona will issue an opinion with respect to the
validity of the shares of common stock being offered hereby. Mr. Boatwright,
a
member of Keller Rohrback, PLC, is a director of the Company. Mr. Boatwright
beneficially owned options to purchase 210,000 shares of our common stock
as of
the date of the opinion.
Item
6. Indemnification of Directors and Officers.
Our
Articles of Incorporation provide to directors and officers indemnification
to
the full extent provided by law, and provide that, to the extent permitted
by
Minnesota law, a director will not be personally liable for monetary damages
to
us or our shareholders for breach of his or her fiduciary duty as a director,
except for liability for certain actions that may not be limited under Minnesota
law.
The
above
discussion of Minnesota law and of our articles of incorporation and bylaws
is
not intended to be exhaustive and is qualified in its entirety by such statutes,
articles of incorporation and bylaws.
In
addition, the Company has entered into indemnification agreements with each
of
its directors and executive officers, pursuant to which the Company has agreed
to indemnify such individuals for any claims made against such individuals
based
on any act, omission or breach of duty committed while acting as director or
officer, except under certain circumstances such as cases involving dishonesty
or improper personal benefit. The Company also maintains an insurance policy
under which its directors and officers are insured against certain liabilities
which might arise out of their relationship with the Company as directors and
officers.
Item
7. Exemption from Registration Claimed.
Not
applicable.
Item
8. Exhibits.
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4.13
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Amended
and Restated 2006 Director Stock Option
Plan
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5.1
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Opinion
of Keller Rohrback, P.L.C.
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23.1
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Consent
of Keller Rohrback, P.L.C. (included in Exhibit
5.1)
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23.2
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Consent
of DeCoria, Maichel & Teague, P.S.
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24.1
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Power
of Attorney (see signature page)
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Item
9. Undertakings
.
(a)
The
undersigned Registrant hereby undertakes:
(i)
To
file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(1)
To
include any prospectus required by Section 10(a)(3) of the Securities
Act;
(2)
To
reflect in the prospectus any facts or events arising after the effective date
of the Registration Statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a fundamental change
in the information set forth in the Registration Statement; and
(3)
To
include any material information with respect to the plan of distribution not
previously disclosed in the Registration Statement or any material change to
such information in the Registration Statement; provided, however, that
paragraphs (a)(i)(1) and (a)(i)(2) above do not apply if the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed with or furnished to the Commission by
the
Registrant pursuant to Section 13 or 15(d) of the Exchange Act that are
incorporated by reference in the Registration Statement;
(ii)
That, for the purpose of determining any liability under the Securities Act,
each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof; and
(iii)
To
remove from registration by means of a post-effective amendment any of the
securities being registered which remain unsold at the termination of the
offering.
(b)
The
undersigned Registrant hereby undertakes that, for purposes of determining
any
liability under the Securities Act, each filing of the Registrant's annual
report pursuant to Section 13(a) or Section 15(d) of the Exchange Act that
is
incorporated by reference in this Registration Statement shall be deemed to
be a
new registration statement relating to the securities offered therein, and
the
offering of such securities at the time shall be deemed to be the initial bona
fide offering thereof.
(c)
Insofar as indemnification for liabilities arising under the Securities Act
may
be permitted to directors, officers and controlling persons of the Registrant
pursuant to the foregoing provisions, or otherwise, the Registrant has been
advised that in the opinion of the Commission such indemnification is against
public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred
or
paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
SIGNATURES
Pursuant
to the requirements of the Securities Act of 1933, the Registrant, IsoRay,
Inc.,
a corporation organized and existing under the laws of the State of Minnesota,
certifies that it has reasonable grounds to believe that it meets all of
the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Richland, State of Washington, on this 17
th
day of
December, 2006.
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ISORAY,
INC.
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By:
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/s/
Roger Girard
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Roger
Girard, Chairman and
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Chief
Executive Officer
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POWER
OF ATTORNEY
KNOW
ALL
PERSONS BY THESE PRESENTS, that each person whose signature appears below
constitutes and appoints Roger Girard, his or her attorney-in-fact and agent,
with the power of substitution and resubsitution, for him or her and in his
or
her name, place or stead, in any and all capacities, to sign any amendments
to
this Registration Statement on Form S-8, and to file such amendments, together
with exhibits and other documents in connection therewith, with the Securities
and Exchange Commission, granting to Roger Girard full power and authority
to do
and perform each and every act and thing requisite and necessary to be done
in
and about the premises, as fully as he or she might or could do in person,
and
ratifying and confirming all that the attorney-in-fact and agent, or his
substitute or substitutes, may do or cause to be done by virtue
hereof.
Pursuant
to the requirements of the Securities Act of 1933, this Registration Statement
has been signed by the following persons in the capacities and on the dates
indicated.
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Signature
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Title
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Date
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/s/
Roger E. Girard
Roger
E. Girard
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Chief
Executive Officer and Chairman
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December
17, 2006
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/s/
Jonathan Hunt
Jonathan
Hunt
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Chief
Financial Officer
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December
17, 2006
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/s/
Stephen R. Boatwright
Stephen
R. Boatwright
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Director
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December
17, 2006
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/s/
Robert R. Kauffman
Robert
R. Kauffman
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Director
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December
17, 2006
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/s/
Thomas C. LaVoy
Thomas
C. LaVoy
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Director
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December
17, 2006
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/s/
David J. Swanberg
David
J. Swanberg
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Director
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December
17, 2006
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/s/
Dwight Babcock
Dwight
Babcock
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Director
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December
17, 2006
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/s/
Albert Smith
Albert
Smith
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Director
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December
17, 2006
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INDEX
TO EXHIBITS
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4.13
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Amended
and Restated 2006 Director Stock Option Plan
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5.1
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Opinion
of Keller Rohrback, PLC
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23.1
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Consent
of Keller Rohrback, PLC (included in
Exhibit 5.1)
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23.2
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Consent
of DeCoria, Maichel & Teague,
P.S.
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24.1
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Power
of Attorney (see signature page)
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ISORAY,
INC.
AMENDED
AND RESTATED 2006 DIRECTOR STOCK OPTION PLAN
1.
PURPOSE
OF PLAN
.
(a)
General
Purpose.
The
purpose of the
ISORAY,
INC. AMENDED AND RESTATED 2006 DIRECTOR STOCK OPTION PLAN (
"
Plan
"
)
is to
further the interests of IsoRay, Inc., a Minnesota corporation (the
"Corporation"
),
and
its subsidiaries (i) by providing an incentive based form of compensation
to the current and former directors of the Corporation, its subsidiaries, and
their predecessor companies in many instances in lieu of cash compensation
and
(ii) by encouraging such persons to invest in shares of the Corporation's
Common Stock, thereby acquiring a proprietary interest in its business and
the
business of its subsidiaries and an increased personal interest in its continued
success and progress.
(b)
Incentive
Stock Options
.
Some
one or more of the options granted under the Plan may be intended to qualify
as
an
"incentive
stock option"
as
defined in Section 422 of the Internal Revenue Code of 1986, as amended
(the
"Code"
),
and
any grant of such an option shall clearly specify that such option is intended
to so qualify. If no such specification is made, an option granted hereunder
shall not be intended to qualify as an
"incentive
stock option."
The
employees eligible to be considered for the grant of incentive stock options
hereunder are any persons regularly employed by the Corporation in a managerial
capacity on a full-time, salaried basis.
2.
STOCK
AND MAXIMUM NUMBER OF SHARES SUBJECT TO PLAN.
(
a)
Description
of Stock and Maximum Shares Allocated.
The
stock subject to the provisions of the Plan and issuable upon exercise of
options granted under the Plan are shares of the Corporation's Common Stock,
$.001 par value, which may be either unissued or treasury shares, as the
Corporation's Board of Directors (the
"Board"
)
may
from time to time determine. Subject to adjustment as provided in
Section 7, the aggregate number of shares of Common Stock covered by the
Plan and issuable upon exercise of all options granted hereunder shall be
1,000,000 shares, which shares shall be reserved for use upon the exercise
of
options to be granted from time to time.
(b)
Restoration
of Unpurchased Shares
.
If an
option expires or terminates for any reason prior to its exercise in full and
before the term of the Plan expires, the shares subject to, but not issued
under
such option shall again be available for other options thereafter
granted.
3.
ADMINISTRATION;
AMENDMENTS
.
(a)
Administration
by Board.
The Plan
shall be administered by the Board with full power to administer the Plan,
to
interpret the Plan and to establish and amend rules and regulations for its
administration.
(b)
Exercise
Price
.
Upon
the grant of any option, the Board shall specify the exercise price for the
shares issuable upon exercise of options granted, which exercise price shall
in
no event be less than 100% of the Fair Market Value per share on the date such
option is granted.
(c)
Fair
Market Value
.
The
Fair Market Value of a share of Common Stock on any particular day shall be
determined as follows:
(1)
If
the
shares are listed or admitted to trading on any securities exchange, the fair
market value shall be the average sales price on such day on the New York Stock
Exchange, or if the shares have not been listed or admitted to trading on the
New York Stock Exchange, on such other securities exchange on which such stock
is then listed or admitted to trading, or if no sale takes place on such day
on
any such exchange, the average of the closing bid and asked price on such day
as
officially quoted on any such exchange;
(2)
If
the
shares are not then listed or admitted to trading on any securities exchange,
the fair market value shall be the average sales price on such day or, if no
sale takes place on such day, the average of the reported closing bid and asked
price on such date, in the over-the-counter market as furnished by the National
Association of Securities Dealers Automated Quotation (
"NASDAQ"
),
or if
NASDAQ at the time is not engaged in the business of reporting such prices,
as
furnished by any similar firm then engaged in such business and selected by
the
Board; or
(3)
If
the
shares are not then listed or admitted to trading in the over-the-counter
market, the fair market value shall be the amount determined by the Board in
a
manner consistent with Treasury Regulation Section 20-2031-2 promulgated
under the Code or in such other manner prescribed by the Secretary of the
Treasury or the Internal Revenue Service.
(4)
If
the
Board determines that the price as determined in Section 3(c)(1) - (3) above
does not represent the fair market value of a share of Common Stock, the Board
may then consider such other factors as it deems appropriate and then fix the
Fair Market Value for the purposes of this Plan.
(d)
Interpretation
.
The
interpretation and construction by the Board of the terms and provisions of
this
Plan and of the agreements governing options and rights granted under the Plan
shall be final and conclusive. No member of the Board shall be liable for any
action taken or determination made in good faith.
(e)
Amendments
to Plan
.
The
Board may, without action on the part of the stockholders of the Corporation,
make such amendments to, changes in and additions to the Plan as it may, from
time to time, deem proper and in the best interests of the Corporation; provided
that the Board may not, without consent of the holder, take any action which
disqualifies any option granted under the Plan as an incentive stock option
for
treatment as such or which adversely affects or impairs the rights of the holder
of any option outstanding under the Plan.
(f)
Termination
of the Plan
.
This
Plan
may be abandoned, suspended, or terminated at any time by the Board; provided,
however, that abandonment, suspension, or termination of this Plan shall not
affect any Options then outstanding under this Plan.
4.
PARTICIPANTS;
DURATION OF PLAN.
(a)
Eligibility
and Participation
.
Options
may be granted in the total amount for the period as allocated by the Board
as
provided in Section 4(b) below only to persons who at the time of grant are
current or former directors of the Corporation, its subsidiaries or their
predecessor companies; provided, however, that no incentive stock option may
be
granted to a director of the Corporation unless such person is also an executive
employee of the Corporation.
(b)
Allotment
.
The
Board shall determine the aggregate number of shares of Common Stock which
may
be optioned from time to time but the Board shall have sole authority to
determine the number of shares and the recipient thereof to be optioned at
any
time. The Board shall not be required to grant all options allocated by the
Board for any given period if it determines, in its sole and exclusive judgment,
that such grant is not in the best interests of the Corporation. The grant
of an
option to any person shall neither entitle such individual to, nor disqualify
such individual from, participation in any other grant of options under the
Plan.
(c)
Limitation
on Grant of Incentive Stock Options
.
Notwithstanding
any other provision of this Plan, no person shall be granted an
"incentive
stock option"
under
this Plan which would cause such person's
"annual
vesting amount"
to
exceed $100,000.00. With respect to any calendar year, a person's
"annual
vesting amount"
is the
aggregate fair market value of stock subject to incentive stock options with
respect to which such options are first exercisable during such calendar year.
For purposes of the foregoing, the aggregate fair market value of stock with
respect to which
"incentive
stock options"
are
first exercisable during any calendar year shall be determined by taking into
account all such options granted to such person under all incentive stock option
plans of the Corporation or of any of its parent or subsidiary
corporations.
(d)
Duration
of Plan
.
The
term of the Plan, unless previously terminated by the Board, is ten years or
until August 15, 2016. No option shall be granted under the Plan unless granted
within ten years after the adoption of the Plan by the Board, but options
outstanding on that date shall not be terminated or otherwise affected by virtue
of the Plan's expiration.
(e)
Approval
of Stockholders
.
If the
Board issues any incentive stock options, solely for the purposes of compliance
with the Code provisions pertaining to incentive stock options, the Plan shall
be submitted to the stockholders of the Corporation for their approval at a
regular meeting to be held within twelve months after adoption of the Plan
by
the Board. Stockholder approval shall be evidenced by the affirmative vote
of
the holders of a majority of the shares of Common Stock present in person or
by
proxy and voting at the meeting. If the stockholders decline to approve the
Plan
at such meeting or if the Plan is not approved by the stockholders within twelve
months after its adoption by the Board, no incentive stock options may be issued
under the Plan but all options granted under the Plan shall remain in full
force
and effect regardless of stockholder approval and the Plan may be used for
future nonincentive stock option issuances. If stockholders fail to approve
the
Plan, all previously issued incentive stock options shall be automatically
converted to nonincentive stock options.
5.
TERMS
AND CONDITIONS OF OPTIONS AND RIGHTS
.
(a)
Individual
Agreements
.
Options
granted under the Plan shall be evidenced by agreements in such form as the
Board from time to time approves, which agreements shall substantially comply
with and be subject to the terms of the Plan, including the terms and conditions
of this Section 5.
(b)
Required
Provisions
.
Each
agreement shall state (i) the total number of shares to which it pertains,
(ii) the exercise price for the shares covered by the option,
(iii) the time at which the option becomes exercisable, (iv) the
scheduled expiration date of the option, (v) the vesting period(s) for such
options, and (vi) the timing and conditions of issuance of any stock option
exercise.
(c)
Period
.
No
option granted under the Plan shall be exercisable for a period in excess of
ten
years from the date of its grant. All options granted shall be subject to
earlier termination as provided in Section 6 or as otherwise set forth in
the agreement granting the option. Unless otherwise provided in the agreement
granting the Stock Option itself, an option may be exercised in full or in
part
at any time or from time to time during the term thereof, or provide for its
exercise in stated installments at stated times during such term.
(d)
No
Fractional Shares
.
Options
shall be granted and exercisable only for whole shares; no fractional shares
will be issuable upon exercise of any option granted under the
Plan.
(e)
Method
of Exercising Option
.
The
method for exercising options granted to former employees of the Corporation
or
of its subsidiaries shall be set forth in the agreement granting the option
itself. All other options shall be exercised by written notice to the
Corporation, addressed to the Corporation at its principal place of business.
Such notice shall state the election to exercise the option and the number
of
shares with respect to which it is being exercised, and shall be signed by
the
person exercising the option. Such notice shall be accompanied by payment in
full of the exercise price for the number of shares being purchased. Payment
may
be made in cash or by bank cashier's check, or if permitted by the terms of
the
option itself, by allocating compensation due to the Grantee by the Corporation
or by any of its subsidiaries to the Corporation as payment for the exercise
price. In lieu of cash, if permitted by the option itself, such payment may
be
made in whole or in part with shares of the same class of stock as are then
subject to the option, delivered in lieu of cash concurrently with such
exercise, the shares so delivered to be valued on the basis of the fair market
value of the stock (determined in a manner specified in the instrument
evidencing the option) on the day preceding the date of exercise. Alternatively,
if permitted by the option itself, the Grantee may, in lieu of using previously
outstanding shares therefore, use some of the shares as to which the option
is
then being exercised. The Corporation shall deliver a certificate or
certificates representing the option shares to the purchaser as soon as
practicable after payment for those shares has been received. If an option
is
exercised by any person other than the optionholder, such notice shall be
accompanied by appropriate proof of the right of such person to exercise the
option. All shares that are purchased and paid for in full upon the exercise
of
an option shall be fully paid and non-assessable.
(f)
No
Rights of a Stockholder
.
An
optionholder shall have no rights as a stockholder with respect to shares
covered by an option. No adjustment will be made for dividends with respect
to
an option for which the record date is prior to the date a stock certificate
is
issued upon exercise of an option. Upon exercise of an option, the holder of
the
shares of Common Stock so received shall have all rights of a stockholder of
the
Corporation as of the date of issuance.
(g)
Effect
of Plan on Employment and Director Status.
The
fact
that the Board has granted an Option to an Optionee under this Plan shall not
confer on such Optionee any right to employment or directorship with the
Corporation or to a position as an officer, director or employee of the
Corporation, nor shall it limit the right of the Corporation or its shareholders
to remove such Optionee from any position held by the Optionee or to terminate
the Optionee's employment or directorship at any time.
(h)
Compliance
with Law
.
No
shares of Corporation Common Stock shall be issued or transferred upon the
exercise of any option unless and until all legal requirements applicable to
the
issuance or transfer of such shares have been completed.
(i)
Other
Provisions
.
The
option agreements may contain such other provisions as the Board deems necessary
to effectuate the sense and purpose of the Plan, including covenants on the
holder's part not to compete and remedies to the Corporation in the event of
the
breach of any such covenant.
6.
ASSIGNABILITY;
EMPLOYMENT AGREEMENT PROVISIONS
.
(a)
Assignability
.
Options
granted under the Plan and the privileges conferred thereby shall not be
assignable or transferable, unless the Board provides otherwise. Options shall
be exercisable by such transferee as set forth in this
Section 6.
(b)
Employment
Agreement Provisions
.
Notwithstanding anything to the contrary in this Section 6, the provisions
in an
employee's employment agreement with the Corporation or any of its subsidiaries
relating to vesting and exercise of options upon such employee's termination,
resignation, disability or death shall control the vesting and exercise of
the
options granted to such employee.
(c)
Termination
of Director Service.
Notwithstanding anything in this Plan to the contrary, the termination of
service by a director for whatever reason or such director's death or disability
shall not affect the exercise period provided in such director's individual
option agreement.
7.
CERTAIN
ADJUSTMENTS
.
(a)
Capital
Adjustments
.
Except
as limited by Section 422 of the Code, the aggregate number of shares of
Common Stock subject to the Plan, the number of shares covered by outstanding
options, and the price per share stated in such options shall be proportionately
adjusted for any increase or decrease in the number of outstanding shares of
Common Stock of the Corporation resulting from a subdivision or consolidation
of
shares or any other capital adjustment or the payment of a stock dividend or
any
other increase or decrease in the number of such shares effected without receipt
by the Corporation of consideration therefor in money, services or
property.
(b)
Corporate
Reorganizations.
Upon
the
dissolution or liquidation of the Corporation, or upon a reorganization, merger
or consolidation of the Corporation as a result of which the outstanding
securities of the class then subject to options hereunder are changed into
or
exchanged for cash or property or securities not of the Corporation's issue,
or
any combination thereof, or upon a sale of substantially all of the property
of
the Corporation to, or the acquisition of stock representing more than eighty
percent (80%) of the voting power of the stock of the Corporation then
outstanding by another corporation or by a group of persons who are required
to
file a Form 13D under the Securities Exchange Act of 1934 (
"34
Act"
),
the
Plan shall terminate, and all options theretofore granted hereunder shall
terminate, unless provision be made in writing in connection with such
transaction for the continuance of the Plan or for the assumption of options
covering the stock of a successor corporation, or a parent or a subsidiary
thereof, with appropriate adjustments as to the number and kind of shares and
prices, in which event the Plan and options theretofore granted shall continue
in the manner and under the terms so provided. If the Plan and unexercised
options shall terminate pursuant to the foregoing sentence, all persons entitled
to exercise any unexercised portions of options then outstanding shall have
the
right, at such time prior to the consummation of the transaction causing such
termination as the Corporation shall designate, to exercise the unexercised
portions of their options, including the portions thereof which would, but
for
this paragraph entitled
"Corporate
Reorganizations,"
not yet
be exercisable.
8.
COMPLIANCE
WITH LEGAL REQUIREMENTS.
(a)
For
Investment Only
.
If, at
the time of exercise of this option, there is not in effect as to the Option
Shares being purchased a registration statement under the Securities Act of
1933, as amended (or any successor statute) (collectively, the
"1933
Act"
),
then
the exercise of this option shall be effective only upon receipt by the
Corporation from the director (or his legal representatives or heirs) of a
written representation that the Option Shares are being purchased for investment
and not for distribution.
(b)
Listing
and Registration of Option Shares.
Any
Option granted under the Plan shall be subject to the requirement that if at
any
time the Board shall determine, in its discretion, that the listing,
registration, or qualification of the shares covered thereby upon any securities
exchange or under any state or federal law or the consent or approval of any
governmental regulatory body is necessary or desirable as a condition of, or
in
connection with, the granting of such Option or the issuance or purchase of
shares thereunder, such Option may not be exercised in whole or in part unless
and until such listing, registration, qualification, consent, or approval shall
have been effected or obtained free of any conditions not acceptable to the
Board.
(c)
Compliance
with Section 16 of the Securities Exchange Act of 1934
.
It is
the intention of the Corporation that the Plan and Options hereunder satisfy
and
be interpreted in a manner, that, in the case of Optionees, satisfies the
applicable requirements of Rule 16b-3 promulgated under Section 16(b) of the
Exchange Act, so that such persons will be entitled to the benefits of Rule
16b-3 or other exemptive rules under Section 16 of the Exchange Act and will
not
be subject to avoidable liability thereunder. If any provision of the Plan
or of
any Option Agreement would otherwise frustrate or conflict with the intent
expressed in this Paragraph 8(c), that provision to the extent possible shall
be
interpreted and deemed amended so as to avoid such conflict. To the extent
of
any remaining irreconcilable conflict with such intent, the provision shall
be
deemed void as applicable to any person who is subject to Section 16 of the
Exchange Act.
9.
APPLICATION
OF FUNDS
.
The
proceeds received by the Corporation from the sale of Common Stock pursuant
to
the exercise of options will be used for general corporate
purposes.
10.
WITHHOLDING
OF TAXES
.
The
Corporation shall have the right to deduct from any other compensation of the
option holder any federal, state or local income taxes (including FICA) required
by law to be withheld with respect to the granting or exercise of any
options.
11.
EXPENSES
OF ADMINISTRATION OF PLAN.
All
costs
and expenses incurred in the operation and administration of this Plan shall
be
borne by the Corporation or one or more of its subsidiaries.
12.
GOVERNING
LAW.
Without
regard to the principles of conflicts of laws, the laws of the State of
Minnesota shall govern and control the validity, interpretation, performance,
and enforcement of this Plan.
13.
INSPECTION
OF PLAN
.
A
copy of
this Plan, and any amendments thereto or modification thereof, shall be
maintained by the Secretary of the Corporation and shall be shown to any proper
person making inquiry about it.
D
ATED
as of
the 4
th
day of
December, 2006.
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ISORAY,
INC.,
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a
Minnesota corporation
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By
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/s/
Roger Girard
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Roger
Girard
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Chief
Executive Officer
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