**Exhibit 10.39**

**EMPLOYMENTAGREEMENT**

 

Advanced CellTechnology, Inc. (“ACT’) desires to retain the services of Michael D. West(“WEST”) in the capacity of President and Chief Scientific Officer; and WESTdesires to provide his services to ACT in that capacity.  Accordingly, for and in consideration of thecommitments set forth herein, ACT and WEST agree as follows:

 

1.             **Position and Duties**

 

ACT agrees to employ WEST in the position ofPresident and Chief Scientific Officer (“President & CSO”).  WEST shall report to the Chief ExecutiveOfficer of ACT, and shall perform any and all duties now or hereafter assignedto WEST by the Chief Executive Officer of ACT, as well as any other dutiesconsistent with the position of President & CSO.  WEST shall be a member of the Board ofDirectors of the Company.  WEST shallabide by ACT’s rules, regulations, and practices as they may from time-to-timebe adopted or modified.

 

2.**            ****Compensation**

 

A.            **Annual Salary**.  ACTshall pay WEST an annual salary of two hundred thousand dollars ($200,000.00).  WEST’s salary shall be paid in equalbi-monthly installments, consistent with ACT’S regular pay practices.  WEST’s salary may be adjusted fromtime-to-time by ACT without affecting this Agreement.  WEST’s annual salary will increase to twohundred fifty thousand dollars ($250,000.00) if ACT closes an equity financingthat provides at least ten million dollars ($10,000,000) of new money to theCompany.

 

B.            **Bonus:** In addition to his Annual Salary,WEST shall be entitled to receive an annual bonus of fifty thousand dollars($50,000.00) per year beginning in 2005, upon the successful completion of hisjob responsibilities.  If WEST’s annualsalary is increased to two hundred fifty thousand dollars ($250,000.00), thenhe shall no longer be entitled to any specific annual bonus; however he willeligible to receive an annual bonus that will be determined by the Board ofDirectors in its sole and absolute discretion.

 

C.            **Expenses:** ACT shall reimburse WEST for reasonable travel andother business expenses incurred by WEST in the performance of his dutieshereunder.

 

3.**             Benefits**

 

WEST shall be entitled to receive benefits under the following benefitplans: group life insurance; medical insurance; and 401K/retirement plan.  ACT may modify, amend or terminate any or allsuch benefit plans at any time.  WEST’srights under any benefit plans now in force or

 

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later adopted by ACT shall be governed solely by theterms of the particular benefit plan.  Inaddition, WEST shall be entitled to the following:

 

A.            **Vacation:**   Three (3) weeks per year.

B**.****           ****Sick Days: **Ten (10) daysper year.

 

4.             **Stock Options****.**  Subjectto the approval of the ACT Board of Directors, ACT will grant WEST an option topurchase the Company’s Common Stock (the *“**Option**”)*under the Company’semployee Stock Option Plan (the *“**Plan**”)*in an amount equal to tenpercent (10.0%) of the Company’s outstanding shares (inclusive of optionreserve and warrants) upon completion of the Series A financing.  The Options will vest over four (4) yearsas follows: 50% of the shares will be vested as of the Employment Date andthereafter 1/48th of the remaining number of shares will vestat the end of each full month of employment. Vesting will depend on WEST’s continued employment with the Company andwill be subject to the terms and conditions of the Plan and a Stock OptionAgreement.  Except as specifically setforth in this Section 4, WEST’s rights under the Plan, or any other stockoption plan later adopted by ACT, shall be governed solely by the terms of thePlan, or the later adopted stock option plan.

 

Notwithstanding the foregoing: (i) upon aChange in Control (as defined in the Plan), the vesting of fifty percent (50%)of the then un-vested portion of the Option and any other outstanding equityawards will be accelerated.

 

5***.******            *****Competitive Activities**

 

During the term of WEST’s employment with ACT andfor one (1) year thereafter, you shall not, for himself or any thirdparty, directly or indirectly (a) divert or attempt to divert from ACT anybusiness of any kind, including, without limitation, the solicitation of orinterference with any of its members, sponsors, employees, volunteers, officersor directors, (b) employ, solicit for employment or recommend foremployment any person employed by ACT, or (c) engage in the formation orpromotion of, or be employed by, any entity that is competitive with ACT. WESTacknowledges that there is a substantial likelihood that the activitiesdescribed in this Section 5 would involve the unauthorized use ordisclosure of the ACT’s Proprietary Information and that use or disclosurewould be extremely difficult to detect.  WESThas accepted the limitations of this Section 5 as a reasonably practicableand unrestrictive means of preventing such use or disclosure.

 

6.             **Inventions/Intellectual Property Belong to ACT**

 

Any and all inventions, discoveries, improvements orintellectual property which WEST has conceived or made or may conceive or makeduring the period of employment relating to or in any way pertaining to orconnected with the systems, products, apparatus, or methods employed,manufactured, constructed or researched by ACT shall be the sole and exclusiveproperty of ACT.

 

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The obligations provided for by this Agreement,except for the requirements as to disclosure in paragraph 7, do not apply toany rights WEST may have acquired in connection with an invention, discovery,improvement or intellectual property for which no equipment, supplies,facility, or trade secret information of the ACT was used and which wasdeveloped entirely on the WEST’s own time and (a) which does not relatedirectly or indirectly to the business of ACT or to ACT’s actual ordemonstrable anticipated research or development, or (b) which does notresult from any work performed by WEST for ACT. The parties understand andagree that this limitation is intended to be consistent with California LaborCode, Section 2870.

 

**7.****            ****Disclosure of Inventions**

 

WEST agrees to disclose promptly to ACT all such improvements,discoveries, or inventions which WEST has made or may make solely, jointly, orcommonly with others, and to assign as appropriate such improvements,discoveries, inventions or intellectual property to ACT, where the rights arethe property of ACT, and agrees to execute and sign any and all applications,assignments, or other instruments which ACT may deem necessary in order toenable it, at its expense, to apply for, prosecute, and obtain Letters Patentof the United States or foreign countries for said improvements, discoveries,inventions or intellectual property, or in order to assign or convey to or vestin ACT the sole and exclusive right, title, and interest in and to saidimprovements, discoveries, inventions, or patents.

 

This paragraph is applicable whether or not the invention, discovery,improvement or intellectual property was made under the circumstances describedin paragraph 6.  WEST agrees to make suchdisclosures understanding that they will be received in confidence and that, amongother things, they are for the purpose of determining whether or not rights tothe related invention, discovery, improvement or intellectual property is theproperty of ACT.

 

**8.****            ****Confidential and Proprietary Information**

 

During his employment, WEST may have access to confidential informationrelating to such matters as ACT’s trade secrets, systems, procedures, manuals,products, and clients.  For purposes ofthis Agreement, “confidential information” means all information and ideas, inany form, relating in any manner to the business of ACT or its clients, unless:(i) the information is or becomes publicly known through lawful means; (ii) theinformation was rightfully in WEST’s possession prior to his employment withACT; or (iii) the information is disclosed to WEST without a confidentialrestriction by a third party who rightfully possesses the information and didnot obtain it, either directly or indirectly, from ACT.

 

WEST understands and agrees that all confidential information will bekept confidential by WEST both during and after his employment under thisAgreement.  WEST further agrees that hewill not, without the prior written approval by ACT, disclose such confidentialinformation, or use such confidential information in any way, either during theterm of this Agreement or at any time thereafter, except as required in thecourse of his employment.

 

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**9.****             Termination of Employment**

 

WEST understands and agrees that his/her employment has no specific term.  This Agreement, and the employmentrelationship, may be terminated by either party with or without cause uponthirty (30) days written notice to the other. Except as otherwise agreed in writing or as otherwise provided in thisAgreement, upon termination neither ACT nor WEST shall have any furtherobligation to each other by way of compensation or otherwise.

 

**10.****          SeparationBenefits.**  Upon termination ofWEST’s employment with the Company for any reason, WEST will receive paymentfor all unpaid salary and vacation accrued as of the date of his termination ofemployment, and his benefits will be continued under the ACT’s then existingbenefit plans and policies for so long as provided under the terms of suchplans and policies and as required by applicable law.  Under certain circumstances, and conditionedin each case upon WEST’s execution of a release and waiver of claims againstACT, its officers and directors, WEST will also be entitled to receiveseverance benefits as set forth below, but WEST will not be entitled to anyother compensation, award or damages with respect’ to your employment ortermination.

 

**(a)****           Definitions.**  For purposes of this Section 10, thefollowing definitions shall apply: *“**Disability**”*shall mean WEST’s complete inabilityto perform his job responsibilities for a period of one hundred eighty (180)consecutive days or one hundred eighty (180) days in the aggregate in anytwelve (12) month period.  *“**Cause**”*means:(i) the failure to properly perform WEST’s job responsibilities, asdetermined reasonably and in good faith by the Board; (ii) commission ofany act of fraud, gross misconduct or dishonesty with respect to the Company; (iii) convictionof, or plea of guilty or “no contest” to, any felony, or a crime involvingmoral turpitude; (iv) breach of any proprietary information and inventionsagreement with the Company; or (v) failure to follow the lawful directionsof the Board.

 

**(b)****           Termination for****Cause, Death, Disability, or Resignation.** In the event of WEST’s termination for “Cause”,termination for death or “Disability,” or his Resignation WEST will not beentitled to any cash severance benefits or additional vesting of any Companyequity awards, including Company stock options.

 

**(c)****           TerminationWithout Cause**.  In the event of WEST’stermination without “Cause,” he will be entitled to (i) a lump sum paymentin an amount equal to twelve (12) months base salary, subject to such payrolldeductions and withholdings as are required by law; and (ii) acceleratedvesting of fifty percent (50%) of the then-unvested shares subject to theOption.

 

**(d)****           Changeof Control**.  In the event of WEST’stermination without “Cause” within twelve (12) months following a Change inControl, in lieu of the benefits set forth in subsection (c) above,you will be entitled to (i) a lump sum payment in an amount equal totwelve (12) months base salary, subject to such payroll deductions andwithholding as are required by law; and (ii) accelerated vesting ofone-hundred percent (100%) of the then-unvested shares subject to the Option.

 

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**11.****          Turnover on Termination**

 

WEST agrees that on or before termination ofemployment, he will return to ACT all originals and copies of all or any partof:

 

a.             Lists and sources of clients;

 

b.             Proposals to clients or drafts of proposals;

 

c.             Reports, job notes, specifications, anddrawings pertaining to clients;

 

d.             Any and all other things, equipment, andwritten materials obtained by WEST during the course of employment from ACT orany client of ACT.

 

e.             Any and all inventions or intellectualproperty developed by WEST during the course of employment.

 

**12.****          Arbitration**

 

Except for injunctive proceedings against unauthorized disclosure ofconfidential information, any and all claims or controversies between ACT andWEST, including but not limited to (1) those involving the construction orapplication of any of the terms, provisions, or conditions of this Agreement; (2) allcontract or tort claims of any kind; and (3) any claim based on anyfederal, state or local law, statute, regulation or ordinance, including claimsfor unlawful discrimination or harassment, shall be settled by arbitration inaccordance with the then current Employment Dispute Resolution Rules ofthe American Arbitration Association.  Judgment on the award rendered by thearbitrator(s) may be entered by any court having jurisdiction thereof.  The location of the arbitration shall be SanFrancisco, California.  Unless theparties mutually agree otherwise, the arbitrator shall be a retired judgeselected from a panel provided by the American Arbitration Association, or theJudicial Arbitration and Mediation Service (JAMS).

 

ACT shall pay the arbitrators fees and costs.  Each party shall pay for its own costs andattorneys’ fees, if any.  However, if anyparty prevails on a statutory claim which affords the prevailing partyattorneys’ fees, the arbitrator may award reasonable attorneys’ fees and coststo the prevailing party.

 

WEST UNDERSTANDS AND AGREES THAT THIS AGREEMENT TO ARBITRATECONSTITUTES A WAIVER OF HIS/HER RIGHT TO A TRIAL BY JURY OF ANY MATTERS COVEREDBY THE ARBITRATION AGREEMENT.

 

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**13.****          Severability**

 

In the event that any of the provisions of this Agreement shall be heldto be invalid or unenforceable in whole or in part, those provisions to theextent enforceable and all other provisions shall nevertheless continue to bevalid and enforceable as though the invalid or unenforceable parts had not beenincluded in this Agreement.  In the eventthat any provision relating to the time period of restriction shall be declaredby a court of competent jurisdiction to exceed the maximum time period suchcourt deems reasonable and enforceable, then the time period of restrictiondeemed reasonable and enforceable by the court shall become and shallthereafter be the maximum time period.

 

**14.****          AgreementRead and Understood**

 

WESTacknowledges that he has carefully read the terms of this Agreement, that hehas had an opportunity to consult with a representative of his own choosingregarding this Agreement, that he understands the terms of this Agreement, andthat he is entering this agreement of his own free will.

 

**15.****         ****Complete Agreement, Modification**

 

This Agreement is the complete agreement between the parties on thesubjects contained herein and supersedes all previous correspondence, promises,representations, and agreements, if any, either written or oral.  No provision of this Agreement may bemodified except by a written document signed both by the ACT and WEST.  WEST understands and agrees that he will be requiredby the Company to execute a comprehensive Proprietary Information Agreement.

 

**16.****          GoverningLaw**

 

This Agreement shall be construed and enforced according to the laws ofthe State of California.

 

 
| Dated: | 12-31-04                                |   | /s/ Michael D. West        |   |
|--------|-----------------------------------------|--------|----------------------------|--------|
|   | **Michael D. West**                     |
|   |                                    |
|   |                                    |
| Dated: | 12/31/2004                              |   | /s/ William M. Caldwell IV |   |
|   | **Advanced Cell Technology, Inc.** |
|   | By: William M. Caldwell IV              |
|   | Title: Chief Executive Officer          |
|        |                                         |        |                            |        |  |

 

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