**Exhibit 10.34**

 

Advanced Cell Technology, Inc.

 

2004 STOCK OPTION PLAN II

 

1.                                       Purpose.  Advanced Cell Technology, Inc.(the “Company”), hereby adopts the Advanced Cell Technology, Inc. 2004Stock Option Plan II (the “Plan”), The Plan is intended to recognize thecontributions made to the Company by employees (including employees who aremembers of the Board of Directors) of and advisors or consultants to theCompany or any Affiliate, to provide such persons with additional incentive todevote themselves to the future success of the Company or an Affiliate, and toimprove the ability of the Company or an Affiliate to attract, retain, andmotivate individuals upon whom the Company’s sustained growth and financialsuccess depend, by providing such persons with an opportunity to acquire orincrease their proprietary interest in the Company through receipt of rights toacquire the Company’s Common Stock, par value $0.001 per Share (the “CommonStock”), In addition, the Plan is intended as an additional incentive todirectors of the Company who are not employees of the Company or an Affiliateto serve on the Board of Directors and to devote themselves to the futuresuccess of the Company by providing them with an opportunity to acquire orincrease their proprietary interest in the Company through the receipt ofOptions to acquire Common Stock.

 

2.                                       Definitions.  Unless the context clearlyindicates otherwise, the following terms shall have the following meanings:

 

(a)                                  “Affiliate” means a corporation which is aparent corporation or a subsidiary corporation with respect to the Companywithin the meaning of Section 424(e) or (f) of the Code.

 

(b)                                 “Board of Directors” means the Board ofDirectors of the company.

 

(c)                                  “Code” means the Internal Revenue Code of1986, as amended.

 

(e)                                  “Committee” means the Board of Directors, ora committee of the Board of Directors appointed in accordance with Section 3of the Plan, when acting in connection with the administration of the Plan.

 

(f)                                    “Company” means Advanced Cell Technology, Inc.,a Delaware corporation.

 

(g)                                 “Consultant” shall mean a non-employeeadvisor or consultant retained by the Company whose services are considered bythe Committee to be of sufficient importance to the Company to merit an awardof Options hereunder.

 

(h)                                 “Disability” shall have the meaning set forthin Section 22(c)(3) of the Code.

 

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(i)                                     “Fair Market Value” shall have the meaningset forth in Subsection 8(b) of the Plan.

 

(j)                                     “ISO” means an Option granted under the Planthat is intended to qualify as an “incentive stock option” within the meaningof Section 422(b) of the code.

 

(k)                                  “Non-employee Director” means a member of theBoard of Directors who is not an employee of the Company or an Affiliate.

 

(1)                                  “Non-qualified Stock Option” means an Optiongranted under the Plan which is not intended to qualify, or otherwise does notqualify, as an “incentive stock option” within the meaning of Section 422(b) ofthe Code.

 

(m)                               “Option” means either an ISO or aNon-qualified Stock Option granted under the Plan.

 

(n)                                 “Optionee” means a person to whom an optionhas been granted under the Plan, which Option has not been exercised and hasnot expired or terminated.

 

(o)                                 “Option Document” means the documentdescribed in Section 8 of the Plan, which sets forth the terms andconditions of each grant of Options.

 

(p)                                 “Option Price” means the price at whichShares may be purchased upon exercise of an Option, as calculated pursuant toSubsection 8(b) of the Plan.

 

(q)                                 “Rule 16b-3” means Rule 16b-3promulgated under the Securities Exchange Act of 1934, as amended.

 

(r)                                    “Shares” means the shares of Common Stock ofthe Company that are the subject of Options.

 

3.                                     Administration of the Plan.  ThePlan shall be administered by the Board of Directors of the Company; however,the Board of Directors may designate a committee composed of at least twonon-employee Directors within the meaning of Rule 16b-3(3) tooperate and administer the Plan in its stead (the “Committee”).  With respect to Non-employee Directors who areto be granted Options in accordance with the provisions of Section 9, thedirectors to whom Options will be granted, the timing of grants of Options, theprice at which Shares may be purchased and the number of Shares covered byOptions granted to each Optionee shall be as specifically set forth herein, andsubject to the foregoing and the other provisions set forth herein, the Plan,as it pertains to Non-employee Directors, shall be administered by theCommittee.

 

(a)                                  Meetings.  The Committee shall holdmeetings at such times and places as it may determine.  Acts approved at a meeting by a majority ofthe members of the Committee or acts approved in writing by unanimous consentof the members of the Committee shall be the valid acts of the Committee.

 

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(b)                                 Grants.  Except with respect to Optionsgranted to Non-employee Directors pursuant to Section 9, the Committeeshall from time to time at its discretion direct the Company to grant Optionspursuant to the terms of the Plan.  TheCommittee shall have plenary authority to (i) determine the Optionees towhom, the times at which, and the price at which Options shall be granted, (ii) determinethe type of Option to be granted and the number of Shares subject thereto, and (iii) approvethe form and terms and conditions of the Option Documents; all subject,however, to the express provisions of the Plan.  In making such determinations, the Committeemay take into account the nature of the Optionee’s services andresponsibilities, the Optionee’s present and potential contribution to theCompany’s success and such other factors, as it may deem relevant.  Notwithstanding the foregoing, grants of theOptions to Non-employee Directors shall be made in accordance with Section 9. The interpretation and construction bythe Committee of any provisions of the Plan or of any Option granted under itshall be final, binding and conclusive.

 

(c)                                   Exculpation.  No member of the Board ofDirectors shall be personally liable for monetary damages for any action takenor any failure to take any action in connection with the administration of thePlan or the granting of Options under the Plan, provided that this Subsection 3(c) shallnot apply to (i) any breach of such member’s duty of loyalty to the Companyor its stockholders, (ii) acts or omissions not in good faith or involvingintentional misconduct or a knowing violation of law, (iii) acts oromissions that would result in liability under Section 174 of the GeneralCorporation Law of the State of Delaware, as amended, and (iv) anytransaction from which the member derived an improper personal benefit.

 

(d)                                  Indemnification.  Serviceon the Committee shall constitute service as a member of the Board of Directorsof the Company.  Each member of the Committeeshall be entitled without further act on his part to indemnity from the Companyto the fullest extent provided by applicable law and the Company’s Certificateof Incorporation and/or By-laws in connection with or arising out of anyaction, suit or proceeding with respect to the administration of the Plan orthe granting of Options thereunder in which he or she may be involved by reasonof his or her being or having been a member of the Committee, whether or not heor she continues to be such member of the Committee at the time of the action,suit or proceeding.

 

4.                                       Grants under the Plan.  Grantsunder the Plan may be in the form of a Non-qualified Stock Option, an ISO or acombination thereof, at the discretion of the Committee.

 

5.                                       Eligibility.  All employees, Consultants andmembers of the Board of Directors shall be eligible to receive Optionshereunder.  However, Non-employeeDirectors may receive Options only pursuant to Section 9.  The Committee, in its sole discretion, shalldetermine all questions of eligibility to receive Options hereunder.

 

6.                                       Shares Subject to Plan.  Theaggregate maximum number of Shares for which Options may be granted pursuant tothe Plan is One Million Three Hundred One Thousand One Hundred and Sixty One(1,301,161) Shares, subject to adjustment as provided in Section 11 of thePlan.  The Shares shall be issued fromauthorized and unissued Common Stock or Common Stock held in or hereafteracquired for the treasury of the Company.  If an Option terminates or expires withouthaving been fully exercised for any reason, the Shares for which the Option wasnot exercised may again be the subject of one or more Options granted pursuantto the Plan.

 

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7.                                      Term of the Plan.  ThePlan is effective as of December 13, 2004, the date on which it wasadopted by the Board of Directors of the Company.  No Option may be granted under the Plan after December 13,2014.

 

8.                                      Option Documents and Terms.  EachOption granted under the Plan shall be a Non-qualified Stock Option unless theoption shall be specifically designated at the time of grant to be an ISO.  If any Option designated an ISO is determinedfor any reason not to qualify as an Incentive Stock Option within the meaningof Section 422 of the Code, such Option shall be treated as aNon-qualified Stock Option for all purposes under the provisions of the Plan.  Options granted pursuant to the Plan shall beevidenced by the Option Documents in such form as the Committee shall from timeto time approve, which Option Documents shall comply with and be subject to thefollowing terms and conditions and such other terms and conditions as theCommittee shall from time to time require which are not inconsistent with theterms of the Plan.  However, theprovisions of this Section 8 shall not be applicable to options granted toNon-employee Directors, except as otherwise provided in Subsection 9(c).

 

(a)                                  Number of Option Shares.  EachOption Document shall state the number of Shares to which it pertains.  An Optionee may receive more than one Option,which may include Options which are intended to be ISO’s and options which arenot intended to be ISO’s, but only on the terms and subject to the conditionsand restrictions of the Plan.

 

(b)                                 Option Price.  EachOption Document shall state the Option Price which, for a Non-qualified StockOption, may be less than, equal to or greater than the Fair Market Value of theShares on the date the Option is granted and, for an ISO, shall be at least100% of the Fair Market Value of the Shares on the date the option is grantedas determined by the Committee in accordance with this Subsection 8(b);provided, however, that if an ISO is granted to an Optionee who then owns,directly or by attribution under Section 424(d) of the Code, sharespossessing more than ten percent of the total combined voting power of allclasses of stock of the Company or an Affiliate, then the Option Price shall beat least 110% of the Fair Market Value of the Shares on the date the Option isgranted.  If the Common Stock is tradedon the OTC Bulletin Board, any similar electronic quotation system or on anationally recognized stock exchange, then the Fair Market Value per shareshall be, if the Common Stock is listed on a national securities exchange orincluded in the NASDAQ National Market System, the last reported sale pricethereof on the relevant date or, if the Common Stock is not so listed orincluded, the average of the last reported “bid” and “asked” prices thereof onthe relevant date, as reported on NASDAQ or, if not so reported, as reported bythe National Quotation Bureau, Inc., or as reported in a customaryfinancial reporting service, as applicable and as the Committee determines.  At any time at which the Common Stock is nottraded on the OTC Bulletin Board, any similar electronic quotation system or ona nationally recognized stock exchange, then the Fair Market Value per shareshall be determined by the Board of Directors, acting in good faith, and suchdetermination shall be final and binding for all purposes of this Plan.

 

(c)                                  Exercise.  No Option shall be deemed tohave been exercised prior to the receipt by the Company of written notice ofsuch exercise and of payment in full of the Option Price for the Shares to bepurchased.  Each such notice shallspecify the number of Shares to be

 

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purchased and (unless theShares are covered by a then current registration statement or a Notificationunder Regulation A under the Securities Act of 1933 (the “Act”) ) shall containthe Optionee’s acknowledgment in form and substance satisfactory to the Companythat (a) such Shares are being purchased for investment and not fordistribution or resale (other than a distribution or resale which, in theopinion of counsel satisfactory to the Company, may be made without violatingthe registration provisions of the Act), (b) the Optionee has been advisedand understands that (i) the Shares have not been registered under the Actand are “restricted securities” within the meaning of Rule 144 under theAct and are subject to restrictions on transfer and (ii) the Company isunder no obligation to register the Shares under the Act or to take any actionwhich would make available to the Optionee any exemption from suchregistration, (c) such Shares may not be transferred without compliancewith all applicable federal and state securities laws, and (d) anappropriate legend referring to the foregoing restrictions on transfer and anyother restrictions imposed under the Option Documents may be endorsed on thecertificates.  Notwithstanding theforegoing, if the Company determines that issuance of Shares should be delayedpending (A) registration under federal or state securities laws, (B) thereceipt of an opinion of counsel satisfactory to the Company that anappropriate exemption from such registration is available, (C) the listingor inclusion of the Shares on any securities exchange or an automated quotationsystem or (D) the consent or approval of any governmental regulatory bodywhose consent or approval is necessary in connection with the issuance of suchShares, the Company may defer exercise of any Option granted hereunder untilany of the events described in this sentence has occurred.

 

(d)                                 Medium of Payment.  AnOptionee shall pay for Shares (i) in cash, (ii) by certified, bank orcashier’s check payable in clearing house funds to the order of the Company, or(iii) by such other mode of payment as the Committee may approve,including payment through a broker in accordance with procedures permitted byRegulation T of the Federal Reserve Board.  Furthermore, the Committee may provide in anOption Document that payment may be made in whole or in part in shares of theCompany’s Common Stock held by the Optionee.  If payment is made in whole or in part inshares of the Company’s Common Stock, then the Optionee shall deliver to theCompany certificates registered in the name of such Optionee representing theshares owned by such Optionee, free of all liens, claims and encumbrances ofevery kind and having an aggregate Fair Market Value on the date of deliverythat is at least as great as the Option Price of the Shares (or relevantportion thereof) with respect to which such Option is to be exercised by the paymentin shares of Common Stock, endorsed in blank or accompanied by stock powersduly endorsed in blank by the Optionee.  Inthe event that certificates for shares of the Company’s Common Stock deliveredto the Company represent a number of shares in excess of the number of sharesrequired to make payment for the Option Price of the Shares (or relevantportion thereof) with respect to which such Option is to be exercised bypayment in shares of Common Stock, the stock certificate issued to the Optioneeshall represent the Shares in respect of which payment is made, and anadditional certificate shall be issued to the Optionee for such excess numberof shares.

 

(e)                                 Termination of Options.

 

 

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(i)                                     No Option shall be exercisable after thefirst to occur of the following:

 

(A)                              Expiration of the Option term specified inthe Option Document, which shall not occur after (10) ten years from thedate of grant, or (2) five years from the date of grant of an ISO if theOptionee on the date of grant owns, directly or by attribution under Section 424(d) ofthe Code, shares possessing more than ten percent (10%) of the total combinedvoting power of all classes of stock of the Company or of an Affiliate.

 

(B)                                A finding by the Committee, after fullconsideration of the facts presented on behalf of both the Company and theOptionee, that the Optionee has breached his employment or service contractwith the Company or an Affiliate, or has been engaged in disloyalty to theCompany or an Affiliate, including, without limitation, fraud, embezzlement,theft, commission of a felony or proven dishonesty in the course of hisemployment or service, or has disclosed trade secrets or confidentialinformation of the Company or an Affiliate.  In such event, in addition to immediatetermination of the option, the Optionee shall automatically forfeit all Sharesfor which the Company has not yet delivered the share certificates upon refundby the Company of the Option Price.  Notwithstandinganything herein to the contrary, the Company may withhold delivery of sharecertificates pending the resolution of any inquiry that could lead to a findingresulting in a forfeiture.

 

(C)                                The date, if any, set by the Board ofDirectors as an accelerated expiration date in the event of the liquidation ordissolution of the Company.

 

(ii)                                  Notwithstandingthe foregoing, the Committee may extend the period during which all or anyportion of an Option may be exercised to a date no later than the Option termspecified in the Option Document pursuant to Subsection 8(e)(i)(A),provided that any change pursuant to this Subsection 8(e)(ii) whichwould cause an ISO to become a Non-qualified Stock Option may be made only withthe consent of the Optionee.  TheCommittee may also grant Options with shorter periods during which the Optionsmay be exercised.

 

(f)                                    Transfers. No Option granted under the Plan may betransferred, except by will or by the laws of descent and distribution.  During the lifetime of the person to whom anoption is granted, such Option may be exercised only by him.  Notwithstanding the foregoing, a Non-qualifiedStock Option may be transferred pursuant to the terms of a “qualified domesticrelations order,” within the meaning of Sections 401(a)(l3) and 414(p) of theCode or within the meaning of Title I of the Employee Retirement IncomeSecurity Act of 1974, as amended.

 

(g)                                 Limitation on ISO Grants.  Inno event shall the aggregate fair market value of the shares of Common Stock(determined at the time the ISO is granted) with respect to which incentivestock options under all incentive stock option plans of the Company or itsAffiliates are exercisable for the first time by the Optionee during anycalendar year exceed $100,000.

 

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(h)                                 Other Provisions.  Subjectto the provisions of the Plan, the Option Documents shall contain such otherprovisions including, without limitation, provisions authorizing the Committeeto accelerate the exercisability of all or any portion of an option grantedpursuant to the Plan, additional restrictions upon the exercise of the optionor additional limitations upon the term of the Option, as the Committee shalldeem advisable.

 

(i)                                      Amendment.  Subject to the provisions ofthe Plan, the Committee shall have the right to amend Option Documents issuedto an Optionee, subject to the Optionee’s consent if such amendment is notfavorable to the Optionee, except that the consent of the Optionee shall not berequired for any amendment made pursuant to Subsection 8(e)(i)(C) or Section 10of the Plan, as applicable.

 

9.                                       Special Provisions Relating to Grants ofOptions to Non-employee Directors.  Options granted pursuant tothe Plan to Non-employee Directors shall be granted, without any further actionby the Committee, in accordance with the terms and conditions set forth in thisSection 9.  Options granted pursuantto this Section 9 shall be evidenced by Option Documents in such form asthe Committee shall from time to time approve, which option Documents shallcomply with and be subject to the following terms and conditions and such otherterms and conditions as the Committee shall from time to time require which arenot inconsistent with the terms of the Plan.

 

(a)                                  Type of Options; Option Price.  Exceptas otherwise provided herein or in the applicable Option Document with respectto the termination of such Options or the acceleration of the exercisabilitythereof, each such Option shall be a Non-qualified Stock Option, exercisable atany time during its term following the date of grant.  The Option Price shall be equal to the FairMarket Value of the Shares on the date the Option is granted.

 

(b)                                 Termination of Option Granted Pursuant to Section 9.  AllOptions granted pursuant to this Section 9 shall be exercisable until thefirst to occur of the following:

 

(i)                                       Expiration of ten (10) years from thedate of grant; or

 

(ii)                                   Expiration of one (1) year from the datethe Optionee’s service with the Company as a director terminates due to the Optionee’sDisability or death.

 

10.                                 Adjustments on Changes in Capitalization.  Theaggregate number of Shares and class of shares as to which Options may begranted hereunder, the number and class or classes of shares covered by eachoutstanding Option and the Option Price thereof shall be appropriately adjustedin the event of a stock dividend, stock split, recapitalization or other changein the number or class of issued and outstanding equity securities of theCompany resulting from a subdivision or consolidation of the Common Stockand/or, if appropriate, other outstanding equity securities or arecapitalization or other capital adjustment (not including the issuance ofCommon Stock on the conversion or exchange of other securities of the Companywhich are convertible into or exchangeable for Common Stock) affecting theCommon Stock which is effected without receipt of consideration by the Company. The

 

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Committee shall haveauthority to determine the adjustments to be made under this Section, and anysuch determination by the Committee shall be final, binding and conclusive;provided, however, that no adjustment shall be made which will cause an ISO tolose its status as such without the consent of the Optionee.

 

11.                              Amendment of the Plan.  TheBoard of Directors of the Company may amend the Plan from time to time in suchmanner as it may deem advisable.  Nevertheless,the Board of Directors of the Company may not change the class of individualseligible to receive an ISO or increase the maximum number of shares as to whichOptions may be granted without obtaining approval, within twelve months beforeor after such action, by vote of a majority of the votes cast at a duly calledmeeting of the stockholders at which a quorum representing a majority of alloutstanding voting stock of the Company is, either in person or by proxy,present and voting on the matter.  Noamendment to the Plan shall adversely affect any outstanding Option, however,without the consent of the Optionee.

 

12.                              No Commitment to Retain.  Thegrant of an Option pursuant to the Plan shall not be construed to imply or toconstitute evidence of any agreement, express or implied, on the part of theCompany or any Affiliate to retain the Optionee in the employ of the Company oran Affiliate and/or as a member of the Company’s Board of Directors or in anyother capacity.

 

13.                              Withholding of Taxes.  Wheneverthe Company proposes or is required to deliver or transfer Shares in connectionwith the exercise of an Option, the Company shall have the right to (a) requirethe recipient to remit or otherwise make available to the Company an amountsufficient to satisfy any federal, state and/or local withholding taxrequirements prior to the delivery or transfer of any certificate orcertificates for such Shares or (b) take whatever other action it deemsnecessary to protect its interests with respect to tax liabilities.  The Company’s obligation to make any deliveryor transfer of Shares shall be conditioned on the Optionee’s compliance, to theCompany’s satisfaction, with any withholding requirement.

 

14.                              Interpretation.  ThePlan is intended to enable transactions under the Plan with respect todirectors and officers (within the meaning of Section 16(a) under theSecurities Exchange Act of 1934, as amended) to satisfy the conditions of Rule 16b-3or its successors; to the extent that any provision of the Plan would cause aconflict with such conditions or would cause the administration of the Plan asprovided in Section 3 to fail to satisfy the conditions of Rule 16b-3,such provision shall be deemed null and void to the extent permitted byapplicable law.  This Section shallnot be applicable if no class of the Company’s equity securities is thenregistered pursuant to Section 12 of the Securities Exchange Act of 1934,as amended.

 

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