Exhibit 10.3

 

Amended and Restated EMPLOYMENT AGREEMENT

 

This Employment Agreement (“Agreement”) is made as of the 22nd day of May, 2014
(the “Effective Date”), between Advanced Cell Technology, Inc., a Delaware
corporation (the “Company”), and Edward Myles (the “Executive”).

 

WHEREAS, the Company and the Executive are parties to that certain Executive
Employment Agreement, dated May 20, 2013 (the “Prior Agreement”);

 

WHEREAS, the Company and the Executive desire to amend and restate the Prior
Agreement in its entirety as of the Effective Date;

 

WHEREAS, the Board of Directors of the Company (the “Board”) has approved and
authorized the entry into this Agreement with Executive.

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements herein
contained and other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the parties agree as follows:

 

1. Position and Duties. The Executive shall serve as the Chief Operating Officer
and Chief Financial Officer, of the Company, and shall have such powers and
duties as may from time to time be prescribed by the Board of Directors of the
Company (the “Board”), the Chief Executive Officer of the Company (the “CEO”) or
other authorized executive. The Executive shall devote his full working time and
efforts to the business and affairs of the Company. Notwithstanding the
foregoing, the Executive may serve on other boards of directors, with the
approval of the Board, or engage in religious, charitable or other community
activities as long as such services and activities are disclosed to the Board
and do not interfere with the Executive’s performance of his duties to the
Company as provided in this Agreement.

 

2. Compensation and Related Matters.

 

(a) Base Salary. The Executive’s 2014 base salary shall be paid at the rate of
$360,000 per year. The Executive’s base salary may be redetermined annually by
the Board or the Compensation Committee. The annual base salary in effect at any
given time is referred to herein as “Base Salary.” The Base Salary shall be
payable in a manner that is consistent with the Company’s usual payroll
practices for senior executives.

 

(b) Incentive Compensation. Commencing in FY 2014, the Executive shall be
eligible to receive cash incentive compensation as determined by the Board or
the Compensation Committee from time to time. The Executive’s target annual
incentive compensation shall be 35% percent of his Base Salary. To earn
incentive compensation, the Executive must be employed by the Company on the day
such incentive compensation is paid.

 

(c) Expenses. The Executive shall be entitled to receive prompt reimbursement
for all reasonable expenses incurred by the Executive in performing services
hereunder, in accordance with the policies and procedures then in effect and
established by the Company for its senior executive officers.

 

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 (d) Other Benefits. The Executive shall be eligible to participate in or
receive benefits under the Company’s employee benefit plans, including any
executive equity compensation plans, in effect from time to time, subject to the
terms of such plans.

 

(e) Vacations. The Executive shall be entitled to accrue up to twenty-five (25)
paid vacation days in each year, which shall be accrued ratably, subject to an
accrual cap of five (5) weeks. The Executive shall also be entitled to all paid
holidays given by the Company to its executives.

 

3. Termination. The Executive’s employment hereunder may be terminated without
any breach of this Agreement under the following circumstances:

 

(a) Death. The Executive’s employment hereunder shall terminate upon his death.

 

(b) Disability. The Company may terminate the Executive’s employment if he is
disabled and unable to perform the essential functions of the Executive’s then
existing position or positions under this Agreement with or without reasonable
accommodation for a period of 180 days (which need not be consecutive) in any
12-month period. If any question shall arise as to whether during any period the
Executive is disabled so as to be unable to perform the essential functions of
the Executive’s then existing position or positions with or without reasonable
accommodation, the Executive may, and at the request of the Company shall,
submit to the Company a certification in reasonable detail by a physician
selected by the Company to whom the Executive or the Executive’s guardian has no
reasonable objection as to whether the Executive is so disabled or how long such
disability is expected to continue, and such certification shall for the
purposes of this Agreement be conclusive of the issue. The Executive shall
cooperate with any reasonable request of the physician in connection with such
certification. If such question shall arise and the Executive shall fail to
submit such certification, the Company’s determination of such issue shall be
binding on the Executive. Nothing in this Section 3(b) shall be construed to
waive the Executive’s rights, if any, under existing law including, without
limitation, the Family and Medical Leave Act of 1993, 29 U.S.C. §2601 et seq.
and the Americans with Disabilities Act, 42 U.S.C. §12101 et seq.

 

(c) Termination by Company for Cause. The Company may terminate the Executive’s
employment hereunder for Cause. For purposes of this Agreement, “Cause” shall
mean: (i) conduct by the Executive constituting a material act of misconduct in
connection with the performance of his duties, including, without limitation,
misappropriation of funds or property of the Company or any of its subsidiaries
or affiliates other than the occasional, customary and de minimis use of Company
property for personal purposes; (ii) the indictment, formal charge, or
conviction of the Executive of any felony or a misdemeanor involving moral
turpitude, deceit, dishonesty or fraud, or any conduct by the Executive that
would reasonably be expected to result in material injury or material
reputational harm to the Company or any of its subsidiaries and affiliates if he
were retained in his position; (iii) continued non-performance by the Executive
of his duties hereunder (other than by reason of the Executive’s physical or
mental illness, incapacity or disability) which has continued for more than 30
days following written notice of such non-performance from the Board of
Directors or the CEO; (iv) a material breach by the Executive of any of the
provisions contained in Section 8 of this Agreement; (v) a material violation by
the Executive of the Company’s written employment policies, including, without
limitation, any insider trading policies (or related procedures) in effect from
time to time; or (vi) failure to cooperate with a bona fide internal
investigation or an investigation by regulatory or law enforcement authorities,
after being instructed by the Company to cooperate, or the willful destruction
or failure to preserve documents or other materials known to be relevant to such
investigation or the inducement of others to fail to cooperate or to produce
documents or other materials in connection with such investigation.

 

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(d) Termination Without Cause. The Company may terminate the Executive’s
employment hereunder at any time without Cause. Any termination by the Company
of the Executive’s employment under this Agreement which does not constitute a
termination for Cause under Section 3(c) and does not result from the death or
disability of the Executive under Section 3(a) or (b) shall be deemed a
termination without Cause.

 

(e) Termination by the Executive. The Executive may terminate his employment
hereunder at any time for any reason, including but not limited to Good Reason.
For purposes of this Agreement, “Good Reason” shall mean that the Executive has
complied with the “Good Reason Process” (hereinafter defined) following the
occurrence of any of the following events: (i) a material diminution in the
Executive’s responsibilities, authority or duties; (ii) a material diminution in
the Executive’s Base Salary except for across-the-board salary reductions based
on the Company’s financial performance similarly affecting all or substantially
all senior management employees of the Company; (iii) a change in the principal
location at which the Executive provides services to the Company of 50 miles or
more; or (iv) the material breach of this Agreement by the Company (each a “Good
Reason Condition”). Notwithstanding the foregoing, a suspension of the
Executive’s responsibilities, authority and/or duties for the Company during any
portion of a bona fide internal investigation or an investigation by regulatory
or law enforcement authorities shall not be a Good Reason Condition. “Good
Reason Process” shall mean that (I) the Executive reasonably determines in good
faith that a Good Reason Condition has occurred; (II) the Executive notifies the
Company in writing of the first occurrence of the Good Reason Condition within
60 days of the first occurrence of such condition; (III) the Executive
cooperates in good faith with the Company’s efforts, for a period not less than
30 days following such notice (the “Cure Period”), to remedy the Good Reason
Condition; (IV) notwithstanding such efforts, the Good Reason Condition
continues to exist; and (V) the Executive terminates his employment within 60
days after the end of the Cure Period. If the Company cures the Good Reason
Condition during the Cure Period, Good Reason shall be deemed not to have
occurred.

 

(f) Notice of Termination. Except for termination as specified in Section 3(a),
any termination of the Executive’s employment by the Company or any such
termination by the Executive shall be communicated by written Notice of
Termination to the other party hereto. For purposes of this Agreement, a “Notice
of Termination” shall mean a notice which shall indicate the specific
termination provision in this Agreement relied upon.

 

(g) Date of Termination. “Date of Termination” shall mean: (i) if the
Executive’s employment is terminated by his death, the date of his death; (ii)
if the Executive’s employment is terminated on account of disability under
Section 3(b) or by the Company with or without Cause under Sections 3(c) or
3(d), the date on which Notice of Termination is given; (iii) if the Executive’s
employment is terminated by the Executive under Section 3(e) without Good
Reason, 30 days after the date on which a Notice of Termination is given, and
(iv) if the Executive’s employment is terminated by the Executive under Section
3(e) with Good Reason, the date on which a Notice of Termination is given after
the end of the Cure Period. Notwithstanding the foregoing in the event that the
Executive gives a Notice of Termination to the Company, the Company may
unilaterally accelerate the Date of Termination and such acceleration shall not
result in a termination by the Company for purposes of this Agreement.

 

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4. Compensation Upon Termination.

 

(a) Termination Generally. If the Executive’s employment with the Company is
terminated for any reason, the Company shall pay or provide to the Executive (or
to the Executive’s authorized representative or estate): (i) any Base Salary
earned through the Date of Termination, unpaid expense reimbursements (subject
to, and in accordance with, Section 2(c) of this Agreement) and unused vacation
that accrued through the Date of Termination (collectively, the “Accrued
Benefit”); and (ii) any vested benefits the Executive may have under any
employee benefit plan of the Company through the Date of Termination, which
vested benefits shall be paid and/or provided in accordance with the terms of
such employee benefit plans. The Accrued Benefit shall be paid on or before the
time required by law but in no event more than 30 days after the Executive’s
Date of Termination.

 

(b) Termination by the Company Without Cause or by the Executive with Good
Reason. If the Executive’s employment is terminated by the Company without Cause
as provided in Section 3(d), or the Executive terminates his employment for Good
Reason as provided in Section 3(e), then the Company shall pay the Executive his
Accrued Benefit. In addition, subject to the Executive signing a separation
agreement containing, among other provisions, a general release of claims in
favor of the Company and related persons and entities, confidentiality, return
of property and non-disparagement and a reaffirmation of the Executive’s
existing restrictive covenants, in a form and manner satisfactory to the Company
(the “Separation Agreement and Release”) and the Separation Agreement and
Release becoming irrevocable within the time period set forth in the Separation
Agreement and Release, and in no event longer than 60 days after the Date of
Termination:

 

(i) the Company shall pay the Executive an amount equal to the Executive’s Base
Salary, payable in substantially equal installments in accordance with the
Company’s payroll practice over 12 months commencing within 60 days after the
Date of Termination (such 12-month period, the “Severance Period”); provided,
however, that if the 60-day period begins in one calendar year and ends in a
second calendar year, such payments shall begin to be paid in the second
calendar year by the last day of such 60-day period; provided, further, that the
initial payment shall include a catch-up payment to cover amounts retroactive to
the day immediately following the Date of Termination.

 

(ii) On the last payroll date in the Severance Period, and provided that the
Executive has complied with the terms of the Separation Agreement and Release
and Executive’s post-employment restrictive covenants pursuant to Section 8 of
this Agreement, the Company shall pay the Executive a lump-sum payment equal to
35% of the Base Salary in effect as of the Date of Termination.

 

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(iii) if the Executive was participating in the Company’s group health plan
immediately prior to the Date of Termination and elects COBRA health
continuation, then, subject to the Executive’s copayment of premium amounts at
the active employees’ rate, the Company shall pay the remainder of the premiums
for the Executive’s participation in the Company’s group health plan: (I) for 12
months; (II) until the Executive becomes eligible for group medical care
coverage through other employment; or (III) for the Executive’s COBRA health
continuation period, whichever ends earliest; provided that Executive notifies
the Company promptly when Executive becomes eligible for group medical care
coverage through another employer, and responds promptly to any reasonable
inquires related to COBRA eligibility;

 

(iv) any time-based stock options or other time-based stock-based awards held by
the Executive as of the Date of Termination that otherwise would have vested
during the twelve (12)-month period immediately following the Date of
Termination had Executive’s employment not been terminated shall become vested
and exercisable on the Date of Termination, and the exercise of any such stock
options or awards shall be subject to the terms of all relevant equity plans and
agreements;

 

(v) any performance based stock options or other stock based awards will not
terminate until three months after the Date of Termination (the “Post Employment
Period”). If a performance based-milestone is achieved during the
Post-Employment Period, you shall be entitled to the same vesting with respect
to the applicable performance based equity award that you would have vested in
if you had been employed on the date of the achievement of the performance
milestone.

 

(vi) Notwithstanding the foregoing, if the Executive materially breaches any of
the provisions contained in Section 8 of this Agreement, all payments and the
vesting opportunities under this Section 4(b) shall immediately cease.

 

5. Change in Control Payment. The provisions of this Section 5 set forth certain
terms of an agreement reached between the Executive and the Company regarding
the Executive’s rights and obligations upon the occurrence of a Change in
Control of the Company. These provisions are intended to assure and encourage in
advance the Executive’s continued attention and dedication to his assigned
duties and his objectivity during the pendency and after the occurrence of any
such event. These provisions shall apply in lieu of, and expressly supersede,
the provisions of Section 4(b) regarding severance pay and benefits upon a
termination of employment, if such termination of employment occurs within 12
months after the occurrence of the first event constituting a Change in Control.
These provisions shall terminate and be of no further force or effect beginning
12 months after the occurrence of a Change in Control.

 

(a) Change in Control. If within 12 months after a Change in Control, the
Executive’s employment is terminated by the Company without Cause as provided in
Section 3(d) or the Executive terminates his employment for Good Reason as
provided in Section 3(e), then, subject to the signing of the Separation
Agreement and Release by the Executive and the Separation Agreement and Release
becoming irrevocable, all within 60 days after the Date of Termination,

 

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(i) the Company shall pay the Executive a lump sum payment equal to (A) the
Executive’s Base Salary in effect as of the Date of the Change of Control (or
the Executive’s Base Salary in effect immediately prior to the Change in
Control, if higher) plus (B) the Executive’s Average Incentive Compensation. For
purposes of this Agreement, “Average Incentive Compensation” shall mean the
average of the annual incentive compensation under Section 2(b) received by the
Executive for the three immediately preceding fiscal years (and for the sake of
clarity, if Executive has not received annual incentive compensation because he
has not been employed for the three immediately preceding fiscal years, then
only the payments for those years in which he was employed and eligible for
annual incentive compensation shall be counted for purposes of this
calculation). In no event shall “Average Incentive Compensation” include any
sign-on bonus, retention bonus or any other special bonus;

 

(ii) if the Executive was participating in the Company’s group health plan
immediately prior to the Date of Termination and elects COBRA health
continuation, then, subject to the Executive’s copayment of premium amounts at
the active employees’ rate, the Company shall pay the remainder of the premiums
for the Executive’s participation in the Company’s group health plan: (I) for 12
months; (II) until the Executive becomes eligible for group medical care
coverage through other employment; or (III) for the Executive’s COBRA health
continuation period, whichever ends earliest; provided that Executive notifies
the Company promptly when Executive becomes eligible for group medical care
coverage through another employer, and responds promptly to any reasonable
inquires related to COBRA eligibility; and

 

(iii) notwithstanding anything to the contrary in any applicable option
agreement or stock-based award agreement, all time-based stock options and other
time based stock-based awards held by the Executive shall immediately accelerate
and become fully exercisable or nonforfeitable as of the Date of the Change of
Control. The exercise of any such stock options or awards shall be subject to
the terms of all relevant equity plans and agreements.

 

(iv) the amounts payable under this Section 5(a) shall be paid or commence to be
paid within 60 days after the Date of Termination, provided, however that if the
60 day period begins in one calendar year and ends in a second calendar year,
such payment shall be paid or commence to be paid in the second calendar year by
the last day of such 60 day period.

 

(b) Additional Limitation.

 

(i) Anything in this Agreement to the contrary notwithstanding, in the event
that the amount of any compensation, payment or distribution by the Company to
or for the benefit of the Executive, whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or otherwise, calculated
in a manner consistent with Section 280G of the Internal Revenue Code of 1986,
as amended (the “Code”) and the applicable regulations thereunder (the
“Severance Payments”), would be subject to the excise tax imposed by Section
4999 of the Code, the following provisions shall apply:

 

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(A) If the Severance Payments, reduced by the sum of (1) the Excise Tax and (2)
the total of the Federal, state, and local income and employment taxes payable
by the Executive on the amount of the Severance Payments which are in excess of
the Threshold Amount, are greater than or equal to the Threshold Amount, the
Executive shall be entitled to the full benefits payable under this Agreement.

 

(B) If the Threshold Amount is less than (x) the Severance Payments, but greater
than (y) the Severance Payments reduced by the sum of (1) the Excise Tax and (2)
the total of the Federal, state, and local income and employment taxes on the
amount of the Severance Payments which are in excess of the Threshold Amount,
then the Severance Payments shall be reduced (but not below zero) to the extent
necessary so that the sum of all Severance Payments shall not exceed the
Threshold Amount. In such event, the Severance Payments shall be reduced in the
following order: (1) cash payments not subject to Section 409A of the Code; (2)
cash payments subject to Section 409A of the Code; (3) equity-based payments and
acceleration; and (4) non-cash forms of benefits. To the extent any payment is
to be made over time (e.g., in installments, etc.), then the payments shall be
reduced in reverse chronological order.

 

(ii) For the purposes of this Section 5(b), “Threshold Amount” shall mean three
times the Executive’s “base amount” within the meaning of Section 280G(b)(3) of
the Code and the regulations promulgated thereunder less one dollar ($1.00); and
“Excise Tax” shall mean the excise tax imposed by Section 4999 of the Code, and
any interest or penalties incurred by the Executive with respect to such excise
tax.

 

(iii) The determination as to which of the alternative provisions of Section
5(b)(i) shall apply to the Executive shall be made by a nationally recognized
accounting firm selected by the Company (the “Accounting Firm”), which shall
provide detailed supporting calculations both to the Company and the Executive
within 15 business days of the Date of Termination, if applicable, or at such
earlier time as is reasonably requested by the Company or the Executive. For
purposes of determining which of the alternative provisions of Section 5(b)(i)
shall apply, the Executive shall be deemed to pay federal income taxes at the
highest marginal rate of federal income taxation applicable to individuals for
the calendar year in which the determination is to be made, and state and local
income taxes at the highest marginal rates of individual taxation in the state
and locality of the Executive’s residence on the Date of Termination, net of the
maximum reduction in federal income taxes which could be obtained from deduction
of such state and local taxes. Any determination by the Accounting Firm shall be
binding upon the Company and the Executive.

 

(c) Definitions. For purposes of this Section 5, the following terms shall have
the following meanings:

 

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“Change in Control” shall mean any of the following:

 

(i) any “person,” as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended (the “Act”) (other than the Company,
any of its subsidiaries, or any trustee, fiduciary or other person or entity
holding securities under any employee benefit plan or trust of the Company or
any of its subsidiaries), together with all “affiliates” and “associates” (as
such terms are defined in Rule 12b-2 under the Act) of such person, shall become
the “beneficial owner” (as such term is defined in Rule 13d-3 under the Act),
directly or indirectly, of securities of the Company representing 50 percent or
more of the combined voting power of the Company’s then outstanding securities
having the right to vote in an election of the Board (“Voting Securities”) (in
such case other than as a result of an acquisition of securities directly from
the Company); or

 

(ii) the date a majority of the members of the Board is replaced during any
12-month period by directors whose appointment or election is not endorsed by a
majority of the members of the Board before the date of the appointment or
election; or

 

(iii) the consummation of (A) any consolidation or merger of the Company where
the stockholders of the Company, immediately prior to the consolidation or
merger, would not, immediately after the consolidation or merger, beneficially
own (as such term is defined in Rule 13d-3 under the Act), directly or
indirectly, shares representing in the aggregate more than 50 percent of the
voting shares of the Company issuing cash or securities in the consolidation or
merger (or of its ultimate parent corporation, if any), or (B) any sale or other
transfer (in one transaction or a series of transactions contemplated or
arranged by any party as a single plan) of all or substantially all of the
assets of the Company.

 

Notwithstanding the foregoing, a “Change in Control” shall not be deemed to have
occurred for purposes of the foregoing clause (i) solely as the result of an
acquisition of securities by the Company which, by reducing the number of shares
of Voting Securities outstanding, increases the proportionate number of Voting
Securities beneficially owned by any person to 50 percent or more of the
combined voting power of all of the then outstanding Voting Securities;
provided, however, that if any person referred to in this sentence shall
thereafter become the beneficial owner of any additional shares of Voting
Securities (other than pursuant to a stock split, stock dividend, or similar
transaction or as a result of an acquisition of securities directly from the
Company) and immediately thereafter beneficially owns 50 percent or more of the
combined voting power of all of the then outstanding Voting Securities, then a
“Change in Control” shall be deemed to have occurred for purposes of the
foregoing clause (i).

 

6. Section 409A.

 

(a) Anything in this Agreement to the contrary notwithstanding, if at the time
of the Executive’s separation from service within the meaning of Section 409A of
the Code, the Company determines that the Executive is a “specified employee”
within the meaning of Section 409A(a)(2)(B)(i) of the Code, then to the extent
any payment or benefit that the Executive becomes entitled to under this
Agreement on account of the Executive’s separation from service would be
considered deferred compensation otherwise subject to the 20 percent additional
tax imposed pursuant to Section 409A(a) of the Code as a result of the
application of Section 409A(a)(2)(B)(i) of the Code, such payment shall not be
payable and such benefit shall not be provided until the date that is the
earlier of (A) six months and one day after the Executive’s separation from
service, or (B) the Executive’s death. If any such delayed cash payment is
otherwise payable on an installment basis, the first payment shall include a
catch-up payment covering amounts that would otherwise have been paid during the
six-month period but for the application of this provision, and the balance of
the installments shall be payable in accordance with their original schedule.

 

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(b) All in-kind benefits provided and expenses eligible for reimbursement under
this Agreement shall be provided by the Company or incurred by the Executive
during the time periods set forth in this Agreement. All reimbursements shall be
paid as soon as administratively practicable, but in no event shall any
reimbursement be paid after the last day of the taxable year following the
taxable year in which the expense was incurred. The amount of in-kind benefits
provided or reimbursable expenses incurred in one taxable year shall not affect
the in-kind benefits to be provided or the expenses eligible for reimbursement
in any other taxable year (except for any lifetime or other aggregate limitation
applicable to medical expenses). Such right to reimbursement or in-kind benefits
is not subject to liquidation or exchange for another benefit.

 

(c) To the extent that any payment or benefit described in this Agreement
constitutes “non-qualified deferred compensation” under Section 409A of the
Code, and to the extent that such payment or benefit is payable upon the
Executive’s termination of employment, then such payments or benefits shall be
payable only upon the Executive’s “separation from service.” The determination
of whether and when a separation from service has occurred shall be made in
accordance with the presumptions set forth in Treasury Regulation Section
1.409A-1(h).

 

(d) The parties intend that this Agreement will be administered in accordance
with Section 409A of the Code. To the extent that any provision of this
Agreement is ambiguous as to its compliance with Section 409A of the Code, the
provision shall be read in such a manner so that all payments hereunder comply
with Section 409A of the Code. Each payment pursuant to this Agreement is
intended to constitute a separate payment for purposes of Treasury Regulation
Section 1.409A-2(b)(2). The parties agree that this Agreement may be amended, as
reasonably requested by either party, and as may be necessary to fully comply
with Section 409A of the Code and all related rules and regulations in order to
preserve the payments and benefits provided hereunder without additional cost to
either party.

 

(e) The Company makes no representation or warranty and shall have no liability
to the Executive or any other person if any provisions of this Agreement are
determined to constitute deferred compensation subject to Section 409A of the
Code but do not satisfy an exemption from, or the conditions of, such Section.

 

7. Indemnity. The Company shall to the extent permitted by law, indemnify and
hold Executive harmless from costs, expense or liability arising out of or
relating to any acts or decisions made by Executive in the course of his
employment to the same extent Company indemnifies and holds harmless other
officers and directors of Company in accordance with Company’s established
policies. This indemnity shall include, without limitation, advancing Executive
attorney’s fees to the fullest extent permitted by applicable law. Company
agrees to continuously maintain Directors and Officers Liability Insurance with
limits of coverage the same as currently in effect, unless a change is mutually
agreed upon by Executive and the Board of Directors of Company, and to include
Executive within said coverage while Executive is employed by Company and for at
least thirty-six (36) months after the termination of Executive's employment by
Company.

 

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8. Confidential Information, Noncompetition and Cooperation.

 

(a) Restrictive Covenant. The Executive agrees to comply with the Employee
Non-Competition, Non-Solicitation, Confidentiality and Assignment Agreement
attached hereto as Exhibit 1 (the “Employee Agreement”), the terms of which are
hereby incorporated by reference into Section 8 of this Agreement.

 

(b) Third-Party Agreements and Rights. The Executive hereby confirms that the
Executive is not bound by the terms of any agreement with any previous employer
or other party which restricts in any way the Executive’s use or disclosure of
information or the Executive’s engagement in any business. The Executive
represents to the Company that the Executive’s execution of this Agreement, the
Executive’s employment with the Company and the performance of the Executive’s
proposed duties for the Company will not violate any obligations the Executive
may have to any such previous employer or other party. In the Executive’s work
for the Company, the Executive will not disclose or make use of any information
in violation of any agreements with or rights of any such previous employer or
other party, and the Executive will not bring to the premises of the Company any
copies or other tangible embodiments of non-public information belonging to or
obtained from any such previous employment or other party.

 

(c) Litigation and Regulatory Cooperation. During and after the Executive’s
employment, the Executive shall cooperate fully with the Company in the defense
or prosecution of any claims or actions now in existence or which may be brought
in the future against or on behalf of the Company which relate to events or
occurrences that transpired while the Executive was employed by the Company. The
Executive’s full cooperation in connection with such claims or actions shall
include, but not be limited to, being available to meet with counsel to prepare
for discovery or trial and to act as a witness on behalf of the Company at
mutually convenient times. During and after the Executive’s employment, the
Executive also shall cooperate fully with the Company in connection with any
investigation or review of any federal, state or local regulatory authority as
any such investigation or review relates to events or occurrences that
transpired while the Executive was employed by the Company. The Company shall
reimburse the Executive for any reasonable out-of-pocket expenses incurred in
connection with the Executive’s performance of obligations pursuant to this
Section 8(c). In addition, the Executive’s cooperation hereunder shall not
unreasonably interfere with his business or personal commitments.

 

(d) Injunction. The Executive agrees that it would be difficult to measure any
damages caused to the Company which might result from any breach by the
Executive of the promises set forth in this Section 8, and that in any event
money damages would be an inadequate remedy for any such breach. Accordingly,
the Executive agrees that if the Executive breaches, or proposes to breach, any
portion of this Agreement, the Company shall be entitled, in addition to all
other remedies that it may have, to seek an injunction or other appropriate
equitable relief to restrain any such breach without showing or proving any
actual damage to the Company.

 

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9. Consent to Jurisdiction. The parties hereby consent to the jurisdiction of
the Superior Court of the Commonwealth of Massachusetts and the United States
District Court for the District of Massachusetts. Accordingly, with respect to
any such court action, the Executive (a) submits to the personal jurisdiction of
such courts; (b) consents to service of process; and (c) waives any other
requirement (whether imposed by statute, rule of court, or otherwise) with
respect to personal jurisdiction or service of process.

 

10. Integration. This Agreement constitutes the entire agreement between the
parties with respect to the subject matter hereof and supersedes all prior
agreements between the parties concerning such subject matter, provided the
Employee Agreement and the Equity Documents shall remain in full force and
effect.

 

11. Withholding. All payments made by the Company to the Executive under this
Agreement shall be net of any tax or other amounts required to be withheld by
the Company under applicable law.

 

12. Successor to the Executive. This Agreement shall inure to the benefit of and
be enforceable by the Executive’s personal representatives, executors,
administrators, heirs, distributees, devisees and legatees. In the event of the
Executive’s death after his termination of employment but prior to the
completion by the Company of all payments due him under this Agreement, the
Company shall continue such payments to the Executive’s beneficiary designated
in writing to the Company prior to his death (or to his estate, if the Executive
fails to make such designation).

 

13. Enforceability. If any portion or provision of this Agreement (including,
without limitation, any portion or provision of any section of this Agreement)
shall to any extent be declared illegal or unenforceable by a court of competent
jurisdiction, then the remainder of this Agreement, or the application of such
portion or provision in circumstances other than those as to which it is so
declared illegal or unenforceable, shall not be affected thereby, and each
portion and provision of this Agreement shall be valid and enforceable to the
fullest extent permitted by law.

 

14. Survival. The provisions of this Agreement shall survive the termination of
this Agreement and/or the termination of the Executive’s employment to the
extent necessary to effectuate the terms contained herein.

 

15. Waiver. No waiver of any provision hereof shall be effective unless made in
writing and signed by the waiving party. The failure of any party to require the
performance of any term or obligation of this Agreement, or the waiver by any
party of any breach of this Agreement, shall not prevent any subsequent
enforcement of such term or obligation or be deemed a waiver of any subsequent
breach.

 

16. Notices. Any notices, requests, demands and other communications provided
for by this Agreement shall be sufficient if in writing and delivered in person
or sent by a nationally recognized overnight courier service or by registered or
certified mail, postage prepaid, return receipt requested, to the Executive at
the last address the Executive has filed in writing with the Company or, in the
case of the Company, at its main offices, attention of the Board.

 

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17. Amendment. This Agreement may be amended or modified only by a written
instrument signed by the Executive and by a duly authorized representative of
the Company.

 

18. Governing Law. This is a Massachusetts contract and shall be construed under
and be governed in all respects by the laws of the Commonwealth of
Massachusetts, without giving effect to the conflict of laws principles of such
Commonwealth. With respect to any disputes concerning federal law, such disputes
shall be determined in accordance with the law as it would be interpreted and
applied by the United States Court of Appeals for the First Circuit.

 

19. Counterparts. This Agreement may be executed in any number of counterparts,
each of which when so executed and delivered shall be taken to be an original;
but such counterparts shall together constitute one and the same document.

 

20. Successor to Company. The Company shall require any successor (whether
direct or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business or assets of the Company expressly to assume
and agree to perform this Agreement to the same extent that the Company would be
required to perform it if no succession had taken place. Failure of the Company
to obtain an assumption of this Agreement at or prior to the effectiveness of
any succession shall be a material breach of this Agreement.

 

21. Gender Neutral. Wherever used herein, a pronoun in the masculine gender
shall be considered as including the feminine gender unless the context clearly
indicates otherwise.

 

IN WITNESS WHEREOF, the parties have executed this Agreement effective on the
date and year first above written.

 

 

  ADVANCED CELL TECHNOLOGY, INC.       By:    /s/ Michael T. Heffernan  
Its:    Chairman       EXECUTIVE       /s/ Edward Myles   Edward Myles

 

 

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ADVANCED CELL TECHNOLOGY, INC.

 

Employee Non-Competition, Non-Solicitation, Confidentiality and Assignment
Agreement

 

In consideration and as a condition of my employment or continued employment by
Advanced Cell Technology, Inc. (together with its subsidiaries and affiliates,
the “Company”), I agree as follows:

 

1. Proprietary Information. I agree that all information, whether or not in
writing, concerning the Company’s business, technology, business relationships
or financial affairs which the Company has not released to the general public
(collectively, “Proprietary Information”) is and will be the exclusive property
of the Company. By way of illustration, Proprietary Information may include
information or material which has not been made generally available to the
public, such as: (a) corporate information, including plans, strategies,
methods, policies, resolutions, negotiations or litigation; (b) marketing
information, including strategies, methods, customer identities or other
information about customers, prospect identities or other information about
prospects, or market analyses or projections; (c) financial information,
including cost and performance data, debt arrangements, equity structure,
investors and holdings, purchasing and sales data and price lists; and (d)
operational and technological information, including plans, specifications,
manuals, forms, templates, software, designs, methods, procedures, formulas,
discoveries, inventions, improvements, concepts and ideas; and (e) personnel
information, including personnel lists, reporting or organizational structure,
resumes, personnel data, compensation structure, performance evaluations and
termination arrangements or documents. Proprietary Information also includes
information received in confidence by the Company from its customers or
suppliers or other third parties.

 

2. Recognition of Company’s Rights. I will not, at any time, without the
Company’s prior written permission, either during or after my employment,
disclose any Proprietary Information to anyone outside of the Company, or use or
permit to be used any Proprietary Information for any purpose other than the
performance of my duties as an employee of the Company. I will cooperate with
the Company and use my best efforts to prevent the unauthorized disclosure of
all Proprietary Information. I will deliver to the Company all copies of
Proprietary Information in my possession or control upon the earlier of a
request by the Company or termination of my employment.

 

3. Rights of Others. I understand that the Company is now and may hereafter be
subject to non-disclosure or confidentiality agreements with third persons which
require the Company to protect or refrain from use of proprietary information. I
agree to be bound by the terms of such agreements in the event I have access to
such proprietary information.

 

4. Commitment to Company; Avoidance of Conflict of Interest. While an employee
of the Company, I will devote my full-time efforts to the Company’s business and
I will not engage in any other business activity that conflicts with my duties
to the Company. I will advise the president of the Company or his or her nominee
at such time as any activity of either the Company or another business presents
me with a conflict of interest or the appearance of a conflict of interest as an
employee of the Company. I will take whatever action is requested of me by the
Company to resolve any conflict or appearance of conflict which it finds to
exist.

 

5. Developments. I will make full and prompt disclosure to the Company of all
inventions, discoveries, designs, developments, methods, modifications,
improvements, processes, algorithms, databases, computer programs, formulae,
techniques, trade secrets, graphics or images, audio or visual works, and other
works of authorship (collectively “Developments”), whether or not patentable or
copyrightable, that are created, made, conceived or reduced to practice by me
(alone or jointly with others) or under my direction during the period of my
employment. I acknowledge that all work performed by me is on a “work for hire”
basis, and I hereby do assign and transfer and, to the extent any such
assignment cannot be made at present, will assign and transfer, to the Company
and its successors and assigns all my right, title and interest in all
Developments that (a) relate to the business of the Company or any customer of
or supplier to the Company or any of the products or services being researched,
developed, manufactured or sold by the Company or which may be used with such
products or services; or (b) result from tasks assigned to me by the Company; or
(c) result from the use of premises or personal property (whether tangible or
intangible) owned, leased or contracted for by the Company (“Company-Related
Developments”), and all related patents, patent applications, trademarks and
trademark applications, copyrights and copyright applications, and other
intellectual property rights in all countries and territories worldwide and
under any international conventions (“Intellectual Property Rights”).

 

 

 

 

6. To preclude any possible uncertainty, I have set forth on Exhibit A attached
hereto a complete list of Developments that I have, alone or jointly with
others, conceived, developed or reduced to practice prior to the commencement of
my employment with the Company that I consider to be my property or the property
of third parties and that I wish to have excluded from the scope of this
Agreement (“Prior Inventions”). If disclosure of any such Prior Invention would
cause me to violate any prior confidentiality agreement, I understand that I am
not to list such Prior Inventions in Exhibit A but am only to disclose a cursory
name for each such invention, a listing of the party(ies) to whom it belongs and
the fact that full disclosure as to such inventions has not been made for that
reason. I have also listed on Exhibit A all patents and patent applications in
which I am named as an inventor, other than those which have been assigned to
the Company (“Other Patent Rights”). If no such disclosure is attached, I
represent that there are no Prior Inventions or Other Patent Rights. If, in the
course of my employment with the Company, I incorporate a Prior Invention into a
Company product, process or machine or other work done for the Company, I hereby
grant to the Company a nonexclusive, royalty-free, paid-up, irrevocable,
worldwide license (with the full right to sublicense) to make, have made,
modify, use, sell, offer for sale and import such Prior Invention.
Notwithstanding the foregoing, I will not incorporate, or permit to be
incorporated, Prior Inventions in any Company-Related Development without the
Company’s prior written consent.

 

7. This Agreement does not obligate me to assign to the Company any Development
which, in the sole judgment of the Company, reasonably exercised, is developed
entirely on my own time and does not relate to the business efforts or research
and development efforts in which, during the period of my employment, the
Company actually is engaged or reasonably would be engaged, and does not result
from the use of premises or equipment owned or leased by the Company. However, I
will also promptly disclose to the Company any such Developments for the purpose
of determining whether they qualify for such exclusion. I understand that to the
extent this Agreement is required to be construed in accordance with the laws of
any state which precludes a requirement in an employee agreement to assign
certain classes of inventions made by an employee, this paragraph 5 will be
interpreted not to apply to any invention which a court rules and/or the Company
agrees falls within such classes. I also hereby waive all claims to any moral
rights or other special rights which I may have or accrue in any Company-Related
Developments.

 

8. Documents and Other Materials. I will keep and maintain adequate and current
records of all Proprietary Information and Company-Related Developments
developed by me during my employment, which records will be available to and
remain the sole property of the Company at all times.

 

9. All files, letters, notes, memoranda, reports, records, data, sketches,
drawings, notebooks, layouts, charts, quotations and proposals, specification
sheets, models, prototypes, or other written, photographic or other tangible
material containing Proprietary Information, whether created by me or others,
which come into my custody or possession, are the exclusive property of the
Company to be used by me only in the performance of my duties for the Company.
Any property situated on the Company’s premises and owned by the Company,
including without limitation computers, disks and other storage media, filing
cabinets or other work areas, is subject to inspection by the Company at any
time with or without notice. In the event of the termination of my employment
for any reason, I will deliver to the Company all files, letters, notes,
memoranda, reports, records, data, sketches, drawings, notebooks, layouts,
charts, quotations and proposals, specification sheets, models, prototypes, or
other written, photographic or other tangible material containing Proprietary
Information, and other materials of any nature pertaining to the Proprietary
Information of the Company and to my work, and will not take or keep in my
possession any of the foregoing or any copies.

 

10. Enforcement of Intellectual Property Rights. I will cooperate fully with the
Company, both during and after my employment with the Company, with respect to
the procurement, maintenance and enforcement of Intellectual Property Rights in
Company-Related Developments. I will sign, both during and after the term of
this Agreement, all papers, including without limitation copyright applications,
patent applications, declarations, oaths, assignments of priority rights, and
powers of attorney, which the Company may deem necessary or desirable in order
to protect its rights and interests in any Company-Related Development. If the
Company is unable, after reasonable effort, to secure my signature on any such
papers, I hereby irrevocably designate and appoint each officer of the Company
as my agent and attorney-in-fact to execute any such papers on my behalf, and to
take any and all actions as the Company may deem necessary or desirable in order
to protect its rights and interests in any Company-Related Development.

 

2

 

 

11. Non-Competition and Non-Solicitation. In order to protect the Company’s
Proprietary Information and good will, during my employment and for a period of
twelve (12) months following the termination of my employment for any reason
(the “Restricted Period”), I will not directly or indirectly, whether as owner,
partner, shareholder, director, manager, consultant, agent, employee,
co-venturer or otherwise, engage, participate or invest in any business activity
anywhere in the United States that is competitive with the Company’s “Business”;
provided that this shall not prohibit any possible investment in publicly traded
stock of a company representing less than one percent of the stock of such
company. The Company’s “Business” is defined as the development of stem cell
derived therapeutics for ocular disorders. In addition, during the Restricted
Period, I will not, directly or indirectly, in any manner, other than for the
benefit of the Company, (a) call upon, solicit, divert, take away, accept or
conduct any business from or with any of the customers or prospective customers
of the Company or any of its suppliers, and/or (b) solicit, entice, attempt to
persuade any other employee or consultant of the Company to leave the Company
for any reason or otherwise participate in or facilitate the hire, directly or
through another entity, of any person who is employed or engaged by the Company
or who was employed or engaged by the Company within six (6) months of any
attempt to hire such person. I acknowledge and agree that if I violate any of
the provisions of this paragraph 11, the running of the Restricted Period will
be extended by the time during which I engage in such violation(s).

 

12. Government Contracts. I acknowledge that the Company may have from time to
time agreements with other persons or with the United States Government or its
agencies which impose obligations or restrictions on the Company regarding
inventions made during the course of work under such agreements or regarding the
confidential nature of such work. I agree to comply with any such obligations or
restrictions upon the direction of the Company. In addition to the rights
assigned under paragraph 5, I also assign to the Company (or any of its
nominees) all rights which I have or acquired in any Developments, full title to
which is required to be in the United States under any contract between the
Company and the United States or any of its agencies.

 

13. Prior Agreements. I hereby represent that, except as I have fully disclosed
previously in writing to the Company, I am not bound by the terms of any
agreement with any previous employer or other party to refrain from using or
disclosing any trade secret or confidential or proprietary information in the
course of my employment with the Company or to refrain from competing, directly
or indirectly, with the business of such previous employer or any other party. I
further represent that my performance of all the terms of this Agreement as an
employee of the Company does not and will not breach any agreement to keep in
confidence proprietary information, knowledge or data acquired by me in
confidence or in trust prior to my employment with the Company. I will not
disclose to the Company or induce the Company to use any confidential or
proprietary information or material belonging to any previous employer or
others.

 

14. Remedies Upon Breach. I understand that the restrictions contained in this
Agreement are necessary for the protection of the business and goodwill of the
Company and I consider them to be reasonable for such purpose. Any breach of
this Agreement is likely to cause the Company substantial and irrevocable damage
and therefore, in the event of such breach, the Company, in addition to such
other remedies which may be available, will be entitled to specific performance
and other injunctive relief, without the posting of a bond.

 

15. Use of Voice, Image and Likeness. I give the Company permission to use any
and all of my voice, image and likeness, with or without using my name, in
connection with the products and/or services of the Company, for the purposes of
advertising and promoting such products and/or services and/or the Company,
and/or for other purposes deemed appropriate by the Company in its reasonable
discretion, except to the extent expressly prohibited by law.

 

3

 

 

 

16. Publications and Public Statements. I will obtain the Company’s written
approval before publishing or submitting for publication any material that
relates to my work at the Company and/or incorporates any Proprietary
Information. To ensure that the Company delivers a consistent message about its
products, services and operations to the public, and further in recognition that
even positive statements may have a detrimental effect on the Company in certain
securities transactions and other contexts, any statement about the Company
which I create, publish or post during my period of employment and for six (6)
months thereafter, on any media accessible by the public, including but not
limited to electronic bulletin boards and Internet-based chat rooms, must first
be reviewed and approved by an officer of the Company before it is released in
the public domain.

 

17. No Employment Obligation. I understand that this Agreement does not create
an obligation on the Company or any other person to continue my employment. I
acknowledge that, unless otherwise agreed in a formal written employment
agreement signed on behalf of the Company by an authorized officer, my
employment with the Company is at will and therefore may be terminated by the
Company or me at any time and for any reason, with or without cause.

 

18. Survival and Assignment by the Company. I understand that my obligations
under this Agreement will continue in accordance with its express terms
regardless of any changes in my title, position, duties, salary, compensation or
benefits or other terms and conditions of employment. I further understand that
my obligations under this Agreement will continue following the termination of
my employment regardless of the manner of such termination and will be binding
upon my heirs, executors and administrators. The Company will have the right to
assign this Agreement to its affiliates, successors and assigns. I expressly
consent to be bound by the provisions of this Agreement for the benefit of the
Company or any parent, subsidiary or affiliate to

whose employ I may be transferred without the necessity that this Agreement be
resigned at the time of such transfer.

 

19. Exit Interview. If and when I depart from the Company, I may be required to
attend an exit interview and sign an “Employee Exit Acknowledgement” to reaffirm
my acceptance and acknowledgement of the obligations set forth in this
Agreement. For twelve (12) months following termination of my employment, I will
notify the Company of any change in my address and of each subsequent employment
or business activity, including the name and address of my employer or other
post-Company employment plans and the nature of my activities.

 

20. Disclosure to Future Employers. I will provide a copy of this Agreement to
any prospective employer, partner or coventurer prior to entering into an
employment, partnership or other business relationship with such person or
entity.

 

21. Severability. In case any provisions (or portions thereof) contained in this
Agreement shall, for any reason, be held invalid, illegal or unenforceable in
any respect, such invalidity, illegality or unenforceability shall not affect
the other provisions of this Agreement, and this Agreement shall be construed as
if such invalid, illegal or unenforceable provision had never been contained
herein. If, moreover, any one or more of the provisions contained in this
Agreement shall for any reason be held to be excessively broad as to duration,
geographical scope, activity or subject, it shall be construed by limiting and
reducing it, so as to be enforceable to the extent compatible with the
applicable law as it shall then appear.

 

22. Interpretation. This Agreement will be deemed to be made and entered into in
the Commonwealth of Massachusetts, and will in all respects be interpreted,
enforced and governed under the laws of the Commonwealth of Massachusetts. I
hereby agree to consent to personal jurisdiction of the state and federal courts
in the Commonwealth of Massachusetts for purposes of enforcing this Agreement,
and waive any objection that I might have to personal jurisdiction or venue in
those courts.

 

[End of Text]

 

 

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I UNDERSTAND THAT THIS AGREEMENT AFFECTS IMPORTANT RIGHTS. BY SIGNING BELOW, I
CERTIFY THAT I HAVE READ IT CAREFULLY AND AM SATISFIED THAT I UNDERSTAND IT
COMPLETELY.

 

IN WITNESS WHEREOF, the undersigned has executed this agreement as a sealed
instrument as of the date set forth below.

 

 

Signed: /s/ Edward Myles                               

 

Type or print name: Edward Myles

 

 

 

 

 

 

 

 

 

 

5

 

 

EXHIBIT A

 

 

To: ADVANCED CELL TECHNOLOGY, INC.     From: Edward Myles Date:
_____________________     SUBJECT: Prior Inventions

 

The following is a complete list of all inventions or improvements relevant to
the subject matter of my employment by the Company that have been made or
conceived or first reduced to practice by me alone or jointly with others prior
to my engagement by the Company:

 

    o No inventions or improvements     o See below:      
_______________________________________________________________      
_______________________________________________________________      
_______________________________________________________________     o Additional
sheets attached     The following is a list of all patents and patent
applications in which I have been named as an inventor:   o None     o See
below:       _______________________________________________________________    
  _______________________________________________________________      
_______________________________________________________________

 

 

 

 

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