**Exhibit 10.46**

 

**EMPLOYMENTAGREEMENT**

 

AdvancedCell Technology, Inc. (“ACT”) desires to retain the services of, James TMurai PhD (“MURAI”) in the capacity of **Associate Director;** and desires to provide his services to ACT in that capacity.  Accordingly, for and in consideration of thecommitments set forth herein, ACT and MURAI agree as follows:

 

**1.****                                     ****Position and Duties**

 

ACT agrees to employ MURAI in the position of AssociateDirector.  MURAI shall report to theChief Scientific Officer (“CSO”) of ACT, and shall perform any and all dutiesnow or hereafter assigned to MURAI by the CSO of ACT, as well as any otherduties consistent with the position of Associate Director.  MURAI shall abide by ACT’s rules,regulations, and practices as they may from time-to-time be adopted ormodified.

 

**2.****                                     ****Compensation**

 

A.**                                  ****Annual Salary.**  ACT shall payMURAI an annual salary of one hundred twenty-five thousand dollars ($125,000.00).  MURAI’s salary shall be paid in equalbi-monthly installments, consistent with ACT’S regular pay practices.  MURAI’s salary may be adjusted fromtime-to-time by ACT without affecting this Agreement.

 

B.**                                    ****Bonus:**  Upon thesuccessful completion of his job responsibilities, in addition to his AnnualSalary, MURAI shall be eligible to receive an annual bonus that will berecommended by the CSO and approved by the CEO and the Board of Director’s ofACT in their sole and absolute discretion. Not withstanding the above, MURAI will be incented upon successfullysubmitting up to five grants for fiscal 2005. MURAI will be awarded an additional 5000 shares of stock for achievingthis.

 

C.**                                    ****Expenses:**  ACT shall reimburse MURAI for reasonabletravel and other business expenses incurred by MURAI in the performance of hisduties hereunder.  If you and the companymutually agree to have you relocated, the company will pay for all moving and relocationexpenses up to $15,000.

 

**3.****                                     ****Benefits**

 

MURAI shall be entitled to receive benefits underthe following benefit plans: group life insurance; medical insurance;disability insurance, and 401K/retirement plan. ACT may modify, amend or terminate any or all such benefit plans at anytime.  MURAI’s rights under any benefitplans now in force or later adopted by ACT shall be governed solely by theterms of the particular benefit plan.  Inaddition, MURAI shall be entitled to the following:

 

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A.**                                  ****Vacation:**   Three (3) weeksper year.

B.**                                    ****Sick Days:**  Ten (10) days per year.

 

**4.****                                     ****Stock Options****.**  Subject to the approval of the ACT Board ofDirectors, ACT will grant MURAI an option to purchase the Company’s CommonStock (the ***“Option*”**)under the Company’s employee Stock Option Plan (the ***“Plan”****)*inan amount equal to 45,000 of the Company’s outstanding shares (inclusive ofoption reserve and warrants).  TheOptions will vest over forty eight (48) months as follows: there will be a 90day probation period and thereafter 1/45th of the remaining number of shares will vest at the end of each fullmonth of employment.  Vesting will dependon MURAI’s continued employment with the Company and will be subject to theterms and conditions of the Plan and a Stock Option Agreement.  Except as specifically set forth in this Section 4,MURAI’s, rights under the Plan, or any other stock option plan later adopted byACT, shall be governed solely by the terms of the Plan, or the later adoptedstock option plan.

 

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

 

During the term of MURAI’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. MURAIacknowledges 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.  MURAIhas accepted the limitations of this Section 5 as a reasonably practicableand unrestrictive means of preventing such use or disclosure.

 

**6.****                                     ****Inventions/IntellectualProperty Belong to ACT**

 

Any and all inventions, discoveries, improvementsor intellectual property which MURAI has conceived or made or may conceive ormake during 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.

 

The obligations provided for by this Agreement,except for the requirements as to disclosure in paragraph 7, do not apply toany rights MURAI 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 MURAI’s own time and (a) which docs 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 MURAI for ACT.

 

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**7.****                                     ****Disclosure of Inventions:** MURAI agrees to disclose promptly to ACT all such improvements,discoveries, or inventions which MURAI 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 theinvention, discovery, improvement or intellectual property was made under thecircumstances described in paragraph 6.  MURAIagrees to make such disclosures understanding that they will be received inconfidence and that, among other things, they are for the purpose ofdetermining whether or not rights to the related invention, discovery,improvement or intellectual property is the property of ACT.

 

**8.****                                     ****Confidential and ProprietaryInformation**

 

During his employment, MURAI may have access toconfidential information relating to such matters as ACT’s trade secrets,systems, procedures, manuals, products, and clients.  For purposes of this Agreement, “confidentialinformation” means all information and ideas, in any form, relating in anymanner to the business of ACT or its clients, unless; (i) the informationis or becomes publicly known through lawful means; (ii) the informationwas rightfully in MURAI’s possession prior to his employment with ACT; or (iii) theinformation is disclosed to MURAI without a confidential restriction by a thirdparty who rightfully possesses the information and did not obtain it, eitherdirectly or indirectly, from ACT.

 

MURAI understands and agrees that all confidentialinformation will be kept confidential by MURAI both during and after hisemployment under this Agreement.  MURAIfurther agrees that he will not, without the prior written approval by ACT,disclose such confidential information, or use such confidential information inany way, either during the term of this Agreement or at any time thereafter,except as required in the course of his employment.

 

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

 

MURAI understands and agrees that his/heremployment has no specific term.  ThisAgreement, and the employment relationship, may be terminated by either partywith or without cause upon thirty (30) days written notice to the other.  Except as otherwise agreed in writing or asotherwise provided in this Agreement, upon termination neither ACT nor MURAIshall have any further obligation to each other by way of compensation orotherwise.

 

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**10.****                              ****Separation Benefits****.**  Upon termination of MURAI’s employment withthe Company for any reason, MURAI will receive payment for all unpaid salaryand vacation accrued as of the date of his termination of employment, and hisbenefits will be continued under the ACT’s then existing benefit plans andpolicies for so long as provided under the terms of such plans and policies andas required by applicable law.  Undercertain circumstances, and conditioned in each case upon MURAI’s execution of arelease and waiver of claims against ACT, its officers and directors, MURAIwill also be entitled to receive severance benefits as set forth below, butMURAI will not be entitled to any other compensation, award or damages with respectto your employment or termination.

 

**(a)****                                 ****Definitions.**  For purposes of this Section 10, thefollowing definitions shall apply: ***“******Disability”*****shallmean MURAI’s complete inability to perform his job responsibilities for aperiod of one hundred eighty (180) consecutive days or one hundred eighty (180)days in the aggregate in any twelve (12) month period.  ***“Cause”*** means: (i) thefailure to properly perform MURAI’s job responsibilities, as determinedreasonably and in good faith by the Board; (ii) commission of any act offraud, 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.**  Inthe event of MURAI’s termination for “Cause”, termination for death or “Disability,”or his Resignation MURAI will not be**entitledto any cash severance benefits or additional vesting of any Company equityawards, including Company stock options.

 

**(c)****                                 ****Termination Without Cause****.**  In the event of MURAI’s termination without “Cause,”he will be entitled to (i) a lump sum payment in an amount equal to three (3) monthsbase salary, subject to such payroll deductions and withholdings as arerequired by law; and (ii) accelerated vesting of fifty percent (50%) ofthe then-unvested shares subject to the Option.

 

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

 

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

 

a.                                       Lists and sourcesof clients;

 

b.                                      Proposals toclients or drafts of proposals;

 

c.                                       Reports, job notes,specifications, and drawings pertaining to clients;

 

d.                                      Any and all otherthings, equipment, and written materials obtained by MURAI during the course ofemployment from ACT or any client of ACT.

 

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e.                                       Any and allinventions or intellectual property developed by MURAI during the course ofemployment.

 

**12.****                              ****Arbitration**

 

Except for injunctive proceedings againstunauthorized disclosure of confidential information, any and all claims orcontroversies between ACT and MURAI, including but not limited to (1) thoseinvolving the construction or application of any of the terms, provisions, orconditions of this Agreement; (2) all contract or tort claims of any kind;and (3) any claim based on any federal, state or local law, statute,regulation or ordinance, including claims for unlawful discrimination orharassment, shall be settled by arbitration in accordance with the then currentEmployment Dispute Resolution Rules of the American ArbitrationAssociation. Judgment on the award rendered by the arbitrator(s) may be enteredby any court having jurisdiction thereof. The location of the arbitration shall be San Francisco, California.  Unless the parties mutually agree otherwise,the arbitrator shall be a retired judge selected from a panel provided by theAmerican Arbitration Association, or the Judicial Arbitration and MediationService (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.

 

MURAI UNDERSTANDS AND AGREES THAT THIS AGREEMENTTO ARBITRATE CONSTITUTES A WAIVER OF HIS/HER RIGHT TO A TRIAL BY JURY OF ANYMATTERS COVERED BY THE ARBITRATION AGREEMENT.

 

**13.****                               Severability**

 

In the event that any of the provisions of thisAgreement shall be held to be invalid or unenforceable in whole or in part,those provisions to the extent enforceable and all other provisions shallnevertheless continue to be valid and enforceable as though the invalid orunenforceable parts had not been included in this Agreement.  In the event that any provision relating tothe time period of restriction shall be declared by a court of competentjurisdiction to exceed the maximum time period such court deems reasonable andenforceable, then the time period of restriction deemed reasonable andenforceable by the court shall become and shall thereafter be the maximum timeperiod.

 

**14.****                              ****Agreement Read andUnderstood**

 

MURAI acknowledges that he has carefullyread the terms of this Agreement, that he has had an opportunity to consultwith a representative of his own choosing regarding this Agreement, that heunderstands the terms of this Agreement, and that he is entering this agreementof his own free will.

 

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

 

This Agreement is the complete agreement betweenthe parties on the subjects contained herein and supersedes all previouscorrespondence, promises, representations, and agreements, if any, eitherwritten or oral.  No provision of thisAgreement may be modified except by a written document signed both by the ACTand MURAI.  MURAI understands and agreesthat he will be required by the Company to execute a comprehensive ProprietaryInformation Agreement.

 

**16.****                              ****Governing Law**

 

This Agreement shall be construed and enforcedaccording to the laws of the State of California.

 

 
| Dated: | 2/9/05  |   | /s/ James T. Murai                      |   |
|--------|---------|--------|-----------------------------------------|--------|
|   |    |   | **James T. Murai, PhD**                 |   |
|   |    |   |                                    |   |
|   |    |   |                                    |   |
| Dated: | 2/17/05 |   | /s/ William M. Caldwell                 |   |
|   |    |   | **Advanced Cell Technology, Inc.** |   |
|   |    |   | By: William M. Caldwell                 |   |
|   |    |   | Title: Chief Executive Officer          |   |
|        |         |        |                                         |        |  |

 

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