Document:

EX-10.72

August 16, 2005

Rodney K.B. Young

[address]

Dear Rodney:

On behalf of StemCells, Inc. (the “Company”), I am pleased to offer you the position of Chief
Financial Officer and Vice President, Finance, under the terms and conditions that follow. As I
have told you, this offer is contingent on Board approval, which I shall seek immediately now that
I have your informal agreement. I shall let you know when I have documented the Board’s approval,
but please reply to this offer in the meanwhile.

You will see that there are a great many enclosures with this letter. I’m sorry to burden you
with all of this, but they are, as you’ll see, important, and I thought you should have copies as
early as possible. Some require your signature, but the only one you need to sign and send hack in
advance of beginning work is the copy of this letter. You needn’t sign the rest until your start
date, and we’ll have extra copies for you then.

1. Starting Date. The date on which your full-time employment with the Company will start is
September 6, 2005.

2. Position and Duties. As Chief Financial Officer and Vice President, Finance, you will be
expected to exert your full-time best efforts to promote and protect the business interests of the
Company. Specifically, but not exclusively, you will be responsible for overseeing the financial
functions of the Company as well as the development and maintenance of financial and accounting
practices and procedures. You will have primary responsibility for the Company’s relationship with
the financial community. You will direct the controllership, accounting, treasury and taxation
functions. You will have primary responsibility for the accuracy and timeliness of all SEC
mandated financial reporting and compliance requirements. You will direct and integrate the
Company’s long term financial planning and annual budgeting process. You will assist the Chief
Executive Officer in the development of strategic business plans and in long term capital raising
activities. You will have primary responsibility for Investor Relations as well as the management
of the Company’s relationships with the external financial community. You will report directly to
the President and Chief Executive Officer. As CFO, you will be an Executive Officer of the
Company, with the obligations of disclosure that status entails. For your convenience, I have
provided you with a Power of Attorney that you may wish to sign and return to me, authorizing me
and two others to file Section 16 forms on your behalf. In addition, and without further
compensation, you agree to serve as treasurer of the Board of Directors of the Company (the
“Board”) and as a director and/or officer of one or more of the Company’s Affiliates, if so elected
or appointed from time to time. For the purposes of this Agreement, ‘‘Affiliates” means all
persons and entities directly or indirectly controlling, controlled by or under common control with
the Company, where control may be by management authority, equity interest or otherwise. It is
understood that your service as treasurer of the Board, and on the board of any Affiliate of the
Company, will not continue past your tenure as Chief Financial Officer and Vice President, Finance,
and you agree to resign, effective on termination of your employment, from any such positions or
directorships you may then hold.

3. Salary. For all services that you perform for the Company and its Affiliates, your base
salary will be at the rate of Two Hundred Fifty Thousand Dollars ($250,000) per year. Your
performance and compensation will be reviewed at least annually by the Compensation Committee of
the Board of Directors (the “Compensation Committee”), beginning January 2007, and your salary may
be increased as determined by the Compensation Committee, in its sole discretion. Your base salary
may not be reduced below the level set forth above without your express consent except as part of a
company-wide salary action approved by the Board of Directors. In addition, under the Company’s
Bonus Plan, the Board, in its sole discretion, may award you a cash bonus of up to twenty percent
(25%) of your base salary, based on the Board’s review of your performance. You will eligible for
inclusion in the Bonus Plan for the 2005 fiscal year on a pro rata basis, based on your performance
from your date of hire through December 31, 2005.

4. Stock Options. You will be granted options to acquire Four Hundred Fifty Thousand
(450,000) shares of the Common Stock of the Company at the closing price of the stock on the market
on which they are listed on September 6, 2005, or on the date on which you begin your employment,
if later. Two Hundred Twenty-Five Thousand (225,000) of such shares shall be granted through the
StemCells, Inc. 2001 Equity Incentive Plan (the “2001 Plan”) and Two Hundred Twenty-Five Thousand
(225,000) of such shares shall be granted through the StemCells, Inc. 2004 Equity Incentive Plan
(the “2004 Plan”), subject to the terms and conditions of the respective Plans. Subject to your
continued employment by the Company, these option will vest over forty-eight (48) months as
follows: (i) one quarter of the shares will vest on the first anniversary of the grant and (ii) the
remaining shares shall vest at the rate of one forty-eighth (1/48) per month on the last day of
each month during the ensuing thirty-six months. In addition, on the first anniversary of the date
on which your employment with the Company begins, you will be granted an option to acquire no less
than Twenty-Five Thousand (25,000) shares of the Common Stock of the Company at the closing price
of the stock on the market on which they are listed on the date of the grant, which, subject to
your continued employment by the Company, will also vest over forty-eight (48) months on a similar
schedule — that is, one quarter of the shares will vest on the first anniversary of the grant and
the remaining shares will vest at the rate of one forty-eighth (1/48) per month on the last day of
each month during the ensuing thirty-six months.

In the event of a Change of Control (as defined below), the Company will accelerate the vesting of
the options and any other stock awards then held by you so that you become fully vested in one
hundred percent (100%) of all options and other stock awards held by you as of the date such Change
of Control occurs. For purposes of this Agreement, a Change of Control shall mean the occurrence of
any of the following: (i) a merger or consolidation involving the Company which results in less
than 50% of the combined voting power of the surviving or resulting entity’s outstanding securities
being held by the stockholders of the Company who were stockholders immediately prior to such
transaction, or (ii) the sale, transfer or other disposition of more than 51% of the Company’s
assets in a single or related series of transactions, or (iii) within any twenty-four (24)
consecutive month period, persons who were members of the Board immediately prior to such
twenty-four (24) month period, together with any persons who were first elected as directors (other
than as a result of any settlement of a proxy or consent solicitation contest or any action taken
to avoid such a contest) during such twenty-four (24) month period by or upon the recommendation of
persons who were members of the Board immediately prior to such twenty-four (24) month period and
who constituted a majority of the Board at the time of such election, cease to constitute a
majority of the Board.

Except as otherwise expressly provided herein, your options shall be governed by the terms of the
applicable Plan, as in effect from time to time. A copy of the 2001 and the 2004 Plans as
currently in effect are enclosed with this letter.

5. Benefits. As an employee of StemCells, you will be eligible to participate in a
comprehensive benefits program which currently includes: medical, dental, and vision benefits for
you and your dependents; term life insurance equivalent to one time your annual base salary up to
$200,000 with a statement of good health; short and long-term disability insurance; and a 401(k)
savings plan & employer match in company stock. You will be eligible to participate in these plans
on the first of the month following your start date, except that you may elect to participate in
the 401(k) plan immediately. Details of these benefit plans will be provided to you upon your
employment. Your paid time off (PTO) as a full-time employee will be 25 days (five weeks) per
year, accrued at a rate of 7.69 hours per pay period. The maximum allowed PTO accrual shall be 44
days (i.e., 352 hours). In addition, the Company currently offers eight paid holidays per year.

6. Conditions of Employment: Employment Agreement, Code of Ethics and Conduct; Right to Work,
Medical Exam. As a condition of accepting this offer of employment, you will be required to (1)
complete, sign and return the Company’s standard form of Employment Agreement; (2) read the
Company’s Code of Ethics and Conduct, then complete, sign and return the Employee Certification and
Agreement of Compliance attached to it; and (3) within the first three days of employment, provide
documents from the enclosed list which prove your identity and right to work in the United States.
You hereby represent that you are not now bound by any employment agreement, confidential or
proprietary information agreement or similar agreement, with any person or entity including without
limitation any current or previous employer, that would impose any restriction on your acceptance
of this offer or that would interfere with your ability to fulfill the responsibilities of your
position with the Company. To underscore an important aspect of the employment agreement, it is
the strong expectation of StemCells that you hold in strictest confidence the confidential business
and scientific information of the Company; and that you also refrain from any improper use of or
disclosure of proprietary information of your current employer or those with whom you might have an
agreement or duty to keep information in confidence,

7. At Will Employment; Termination and Termination Benefits. Your employment with the Company
is “at will” and for an unspecified duration, which means that neither this offer letter nor any
policy or procedure of StemCells (including the stock vesting and other payments made to you by the
Company over time based on your continued employment with the Company), nor any verbal
representation, shall confer any right to continuing employment. Either you or StemCells may
terminate your employment relationship at any time with or without cause.

In the event that your employment with StemCells is terminated by the Company without Cause
(defined below) or you resign for Good Reason (defined below), you will receive, as severance, an
amount equal to six (6) months’ of salary, at your base salary rate in effect at the time your
employment terminates. This amount will be paid out over six (6) months, on the same schedule as
salary payments are made to employees generally, and will be subject to the same withholding and
other deductions, and legally required employer contributions as salary. Employee benefits,
including 401(k) contributions by the Company, will terminate on your employment termination date,
but StemCells will pay all premiums necessary to maintain your group health insurance coverage in
effect for six (6) months after the termination date, if you make the COBRA election.

If your employment is terminated by the Company without Cause or by you for Good Reason within
twelve (12) months after a Change of Control (as defined above), the Company will pay you, as
severance, twelve (12) months of continuing base salary payments (at your last base salary rate),
and provide you with twelve (12) months of Company-paid COBRA health insurance coverage, if you
make the COBRA election. The Company will “gross you up” for any tax impact to you associated with
this health insurance benefit. These severance benefits shall be in addition to any other
option-related benefits to which you may be entitled under the governing equity incentive plans or
under this Agreement. These severance benefits shall, however, be instead of and not in addition
to the severance benefits provided in the preceding paragraph.

For the purposes of this Section, “Cause” means any of the following, as determined by the Company
in its reasonable judgment, (i) your willful failure to perform your material duties and
responsibilities to the Company (including, without limitation, those duties and responsibilities
described in this letter; (ii) your material breach of the obligations of confidentiality in this
letter agreement, your “Employment Agreement” or of the Company’s Code of Ethics and Conduct; (iii)
fraud, embezzlement or other material dishonesty with respect to the Company or any of its
Affiliates; or (iv) your conviction of, or plea of nolo contendere to, a felony.

For purposes of this Section, “Good Reason” for you to resign your employment shall exist if,
without your consent, there is a material breach by the Company of any provision of this Agreement,
including, without limitation, any material diminution in your authority or responsibilities from
that contemplated by Section 2 hereof, which breach continues for more than ten (10) business days
following receipt by the Company of written notice from you setting forth in reasonable detail the
nature of such breach.

Your employment with the Company remains “at will” as provided in the first paragraph of this
Section 7, and in the event of termination of your employment, you will not be entitled to any
severance pay or other benefits, damages or compensation of any kind, except as expressly provided
in this Agreement.

8. Indemnification. The Company shall indemnify you for all acts and omissions by you in the
course and scope of your employment hereunder to the maximum extent extended to any other officer
of the Company, and to the fullest extent provided by law. The Company’s obligations under this
provision shall survive termination of your employment for any reason.

9. Withholding. All payments and reimbursements made by the Company under this Agreement
shall be reduced by any tax or other amounts required to be withheld by the Company under
applicable law.

10. Assignment. Neither you nor the Company may make any assignment of this Agreement or any
interest herein, by operation of law or otherwise, without the prior written consent of the other;
provided, however, that the Company may assign its rights and obligations under this Agreement
without your consent to one of its Affiliates or to any Person with whom the Company shall
hereafter affect a reorganization, consolidation or merger or to whom the Company transfers all or
substantially all of its properties or assets. This Agreement shall inure to the benefit of and be
binding upon you and the Company and each of your respective successors, executors, administrators,
heirs and permitted assigns.

11. Waiver. Except as otherwise expressly provided in this Agreement, no waiver of any
provision hereof shall be effective unless made in writing and signed by the waiving party. The
failure of either party to require performance of any term or obligation of this Agreement, or the
waiver by either 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.

12. Severability. If any portion or provision 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.

13. Notices. Except as otherwise expressly provided herein, any notices, requests, demands
and other communications provided for by this Agreement shall be in writing and shall be effective
when delivered in person or deposited in the United States mail, postage prepaid, registered or
certified, and addressed to you at your last known address on the books of the Company or, in the
case of the Company, at its main office, attention of the Chairman of the Board.

14. Captions. The captions and headings in this Agreement are for convenience only and in no
way define or describe the scope or content of any provision of this Agreement.

15. Entire Agreement. This Agreement sets forth the entire agreement and understanding
between you and the Company regarding your employment and any related matters and supersedes all
prior communications, agreements and understandings, written and oral, with respect to those
matters. This Agreement may not be amended or modified, except by an agreement in writing signed
by you and the Chairman of the Board or other specifically authorized representative of the
Company.

16. Governing Law. This Agreement shall be governed, construed and enforced in accordance
with the laws of California, without regard to the conflict of laws principles thereof.

17. No Conflicting Agreements. You hereby represent to the Company that neither your
execution and delivery of this Agreement nor your acceptance of employment with the Company nor
your performance under this Agreement will conflict with or result in a breach of any of the terms,
conditions or provisions of any agreement to which you are a party or are bound or any order,
injunction, judgment or decrees of any court or governmental authority or any arbitration award
applicable to you.

18. Compliance with Agreement. The Company’s obligations under this Agreement and its
obligation to deliver stock under the terms of the stock options granted pursuant to the terms of
this Agreement (or otherwise granted you during the course of your employment) are conditioned on
your compliance with the terms and conditions of this Agreement and the accuracy of the
representations made to the Company by you herein.

If the foregoing is acceptable to you, please sign the enclosed copy of this letter in the
space provided below and return it to me, whereupon this letter and such copy will constitute a
binding agreement between you and the Company on the basis set forth above as of the date first
above written.

Sincerely yours,

STEMCELLS, INC.

	 	 	 
	 
	 	 
	
 
	 	By: /s/
	
 
	 	 
	
 
	 	Martin McGlynn

President and CEO
	 
	 	 
	
 
	 	Accepted and agreed:
	
 
	 	/s/
	
 
	 	 

	 	 	 
	Rodney K.B. Young
	Date:	 	 	8/17/2005
	Enclosures:	 	 	2001 Equity Incentive Plan (see Section 4)

2004 Equity Incentive Plan (see Section 4)

Benefits Summary (see Section 5)

List of documents demonstrating right to work (see Section 6)

Copy of this letter, for signature and returnEX-10.73

AGREEMENT FOR CONSULTING SERVICES

This Agreement is made by and between StemCells, Inc. (the “Company”) and Judi Lum (the
“Consultant”), and shall be effective as of the date that Rodney K.B. Young takes office as the
Company’s Chief Financial Officer or September 7, 2005, whichever is earlier (the “Effective
Date”).

	 	1.	 	Consultant hereby agrees to resign from the Company’s employment effective on the Effective
Date and the Company hereby agrees to accept her resignation.

	 	2.	 	Services. The Consultant shall provide to the Company consulting services in the field
referred to in Exhibit A/Item 1 or as otherwise agreed by the parties in accordance with the
terms and conditions contained in this Agreement.

	 	3.	 	Term. The services provided by the Consultant to the Company shall be performed for the term
set forth in Exhibit A/Item 2. The Consultant shall coordinate work efforts and report
progress regularly to the individual set forth in Exhibit A/Item 3.

	 	4.	 	Payment for Service Rendered. For providing the consulting services as referred herein, the
Company shall compensate the Consultant as set forth in Exhibit A/Item 4. In addition to all
other compensation, the Company shall cause one quarter of the option shares granted
Consultant in November 2004 (i.e., 106,250 shares) to vest on the Effective Date hereof, and
to remain exercisable for 3 months thereafter. As of the Effective Date, Company shall also
pay Consultant any accrued unused paid time off (“PTO”). Further, Company shall contribute
to Consultant’s existing 401(k) plan a quarterly match of the lesser of 3% of earned income or
half of Consultant’s contribution (up to a maximum of 6% of Consultant’s salary) up to the
Effective Date, including accumulated PTO if any.

	 	5.	 	Consultant’s Warranties. The Consultant hereby warrants that the Consultant is in no way
compromising any rights or trust relationships between any other party and the Consultant, or
creating a conflict of interest for the Consultant. The Consultant further warrants that she
is entitled to enter into this Agreement.

	 	6.	 	Ethics Policy. The Company’s Corporate Code of Ethics and Conduct (the “Code”) is attached
to this Agreement as Exhibit B. Consultant agrees to abide by all relevant provisions of the
Code for the duration of this Agreement.

	 	7.	 	Nature of Relationship. The Consultant is an independent contractor and will not act as an
agent of the Company nor shall be deemed an employee of the Company for the purposes of any
employee benefit programs, unemployment benefits or otherwise. Because the Consultant has
heretofore been an employee of the Company, however, income taxes and other normal payroll
deductions will be withheld from Consultant’s payments as provided in Exhibit A/Item 4. The
Consultant shall not enter into any agreement or incur any obligations on the Company’s
behalf, or commit the Company in any manner, without the Company’s prior written consent.

	 	8.	 	Inventions, Patents and Technology. The Consultant shall promptly and fully disclose to the
Company any and all inventions, improvements, discoveries, developments, original works of
authorship, trade secrets, or other intellectual property (“Proprietary Information”)
conceived, developed or reduced to practice by the Consultant during the performance of the
consulting services performed for the Company hereunder and related to such services,
regardless of whether such Proprietary Information is patentable, copyrightable, both or
neither. The Consultant shall treat all Proprietary Information as the confidential
information of the Company. The Consultant agrees to, and does hereby, assign to the Company
and its successors and assigns, without further consideration, the entire right, title and
interest in and to each of the Proprietary Information, including the copyright in the case of
copyrightable works. The Consultant further agrees to execute all applications for patents
and/or copyrights, domestic or foreign, assignments and other papers necessary to secure and
enforce rights relating to the Proprietary Information.

	 	9.	 	Confidentiality. The Consultant agrees not to use (except for the Company’s benefit) or
divulge to anyone, either during the term of this Agreement or thereafter, any of the
Company’s trade secrets, the Proprietary Information or other proprietary data acquired by the
Consultant in carrying out the terms of this Agreement. The Consultant further agrees to turn
over to the Company, or make such disposition thereof as may be directed or approved by the
Company, any notebook, data, information or other material acquired or compiled by the
Consultant in carrying out the terms of this Agreement.

	 	10.	 	Termination.

a. Either party may terminate this Agreement by giving written notice at any time after the
first two weeks following the Effective Date. In such event, Company shall pay Consultant
the amount due through the End Date as set forth in in Exhibit A/Item 2.

b. Termination shall not relieve Consultant of any continuing obligations under paragraphs 8
or 9, nor relieve Consultant and/or the Company of any continuing obligations under Exhibit
A/Item 4 and Exhibit C of this Agreement, all of which shall survive termination or
expiration of this Agreement.

	 	11.	 	Consultant’s Covenants. Consultant agrees to notify the Company before accepting employment,
a consultancy, or entering a relationship of any other kind with any potential competitor of
the Company. If the Company determines that Consultant’s relationship with such a competitor
creates an irreconcilable conflict of interest, it may terminate the Agreement immediately.

	 	12.	 	The parties hereto agree that this Agreement is contingent on the execution and
non-revocation of the Separation Agreement and General Release attached as Exhibit C hereto.

	 	13.	 	Indemnification. Company shall indemnify and hold harmless Consultant against any
claims or liabilities arising out of Consultant’s provision of consulting services hereunder
to the fullest extent permitted by law, except and to the extent that such claims or
liabilities arise from Consultant’s wilful misconduct or gross negligence.

	 	14.	 	Miscellaneous.

a. No failure on the part of either party to exercise, and no delay in exercising, any right
or remedy hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any right or remedy hereunder preclude any other or further exercise thereof or
the exercise of any other right or remedy granted hereby, or by any related document or by
law.

b. This Agreement shall be deemed to be a contract made under the law of the State of
California and for all purposes it, and any related or supplemental documents and notices,
shall be construed in accordance with and governed by the law of such State.

c. This Agreement may not be and shall not be deemed or construed to have been modified,
amended, rescinded, canceled or waived, in whole or in part, except by written instruments
signed by the parties hereto.

d. This Agreement, including the exhibits attached hereto and made a part hereof, constitutes
and expresses the entire Agreement and understanding between the parties. All previous
discussions, promises, representations and understandings between the parties relative to
this Agreement, if any, have been merged into this document.

e. The Consultant may not subcontract any part or all of the services to be provided without
the prior written consent of the Company.

In witness whereof, the parties have executed this Agreement on August 30, 2005.

	 	 	 	 	 	 	 	 	 
	StemCells, Inc.

	 	 	 	 	 	 	 	Consultant
	 
	 	 	 	 	 	 	 	 
	_______/s/______________________
	 	 	 	____/s/________________________
	 
	 	 	 	 	 	 	 	 
	 
	 	 
	 
	 	 	 	 	 	 	 	 
	By:

	 	Iris Brest

General Counsel
	 	address:
	 	Judi Lum

	
 
	 	3155 Porter Drive

Palo Alto, California 94304
	 	

	 	

	 
	 	 	 	 	 	 	 	 
	Tel:

	 	 	650.475.3106	 	 	Tel:
	 	

	
 
	 	 	 	 	 	SS No.
	 	     [SS No.]     
	
 
	 	 	 	 	 	 	 	 

1

Exhibit A

1. Description of consulting services: Consulting on financial functions of the Company and
development and maintenance of financial and accounting practices and procedures, including
assistance in assuring the accuracy and timeliness of SEC mandated financial reporting and
compliance requirements and advice on strategic business plans; providing information and support
to the Company’s CFO. The services shall be provided by phone, fax and/or e-mail, and on site at
the Company as may be appropriate and convenient during the term of this Agreement. After the
first two weeks of this Agreement, Consultant shall provide said services only at the request of
the Company subject to Consultant’s availability and consent.

2. Duration of Agreement: This Agreement for consulting services begins on the Effective Date and
will end without further notice six (6) months and two (2) weeks after the Effective Date (the “End
Date”) unless sooner terminated in accordance with paragraph 10.

3. The Consultant shall report to: Rodney K.B. Young

4. Payment for services: For services to be rendered by the Consultant hereunder, at the request
of the Company, the Company will pay the Consultant Seventeen Thousand Nine Hundred seventeen
dollars ($17,917) per month, on the same schedule as salary payments are made to Company employees,
subject to the same withholding and other deductions and legally-required employer contributions as
if the payments were salary. No Company 401(k) contributions or other employee benefits will be
paid. If the Consultant makes the COBRA election, the Company will pay the employer’s share of
Consultant’s health plans (medical, vision and dental, including the Health Savings Account
deductible) until the End Date. The Consultant will also be reimbursed for reasonable expenses
that are directly related to consulting requested by the Company; such expenses will be reimbursed
within 30 days of the receipt of a signed request detailing expenses (with receipts). In the event
this Agreement is terminated by Consultant under section 10, payments shall continue to be made on
a monthly (and/or bi-weekly) basis through the End Date. In the event this Agreement is terminated
by the Company under Section 10, amounts that would have become due and payable during the period
from the date of such termination through the End Date but not yet paid shall be paid to Consultant
within 30 days of such termination. In addition to the other payments mentioned above, when and if
Company’s Board of Directors awards bonuses for 2005, Consultant shall receive 8/12 of that
proportion of her target bonus that is generally awarded; the 8/12 reflects the proration for the
fraction of the year during which she served as CFO. Such bonus shall be paid whether or not this
Agreement has been terminated by either party under Section 10. For the avoidance of doubt, it is
specifically agreed that declaring a Company bonus, and the amount of such bonus, if any, are
matters in the complete discretion of the Company’s Board of Directors.

2

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